July 27, 2005

 

US Wheat Review on Tuesday: Up on CBOT corn, soy spillover support

 

 

U.S. wheat futures settled modestly higher Tuesday after earlier breaking through major moving averages with spillover support from sharply higher Chicago Board of Trade corn and soybean futures, sources said.

 

Closely moving in relation to sharp gains in CBOT corn and soybeans, wheat pulled back at midday before rallying near the close.

 

CBOT September wheat settled 2 3/4 cents higher at $3.28 1/2 per bushel. December wheat closed up 2 3/4 cents at $3.43 1/2.

 

Prior to the close, CBOT September wheat broke through the 200-day moving average of $3.32 1/2 with a high of $3.33 1/2. CBOT December wheat closed above the 200-day moving average of $3.42 1/4 and earlier in the session nearly broke through the 100-day moving average of $3.47 3/4 on its high of $3.47 1/2.

 

"Wheat did what it was supposed to do," a CBOT broker said. "The other markets need a bounce, but wheat does not."

 

CBOT September corn settled 3 3/4 cents higher at $2.34 1/4. CBOT September soybeans ended up 4 3/4 cents at $6.79 1/4.

 

In CBOT wheat trade, Calyon Financial bought 500 September, Cargill Investor Services bought 1,000 September, Fimat bought 300 September, Man Financial bought 200 September, Prudential Financial, Rand Financial and Refco each bought 200 September, RJ O'Brien bought 500 September, and Tenco bought 200 September and 300 December.

 

Cargill sold 500 September, Fimat and O'Connor each sold 200 September, Man Financial sold 1,200 September, and Prudential Financial sold 300 December.

 

Funds were net buyers of an estimated 1,300 CBOT wheat contracts.

 

Spot cash U.S. soft red winter wheat basis bids were unchanged to firm Tuesday, cash sources said.

 

In other wheat news, the North Dakota spring wheat crop looks similar to last year, with little disease pressure, scouts on one leg of the 2005 Hard Spring and Durum Wheat Tour said Tuesday.

 

The 2005 tour began Tuesday and will conclude Thursday afternoon in Fargo after traveling across North Dakota, the top U.S. spring and durum wheat producer. Estimates for 2005 North Dakota spring wheat and durum yields are scheduled to be released by 3 p.m. CDT Thursday, but production estimates will not be calculated.

 

 

Kansas City Board of Trade

 

KCBT September hard red winter wheat futures ended up 3 3/4 cents at $3.37 1/2, while KCBT December wheat settled up 3 3/4 cents at $3.50 1/4 a bushel.

 

In the absence of fresh fundamental news, Kansas City wheat followed CBOT prices, a KCBT broker said.

 

ADM Investor Services bought 400 September and sold 200 September, while Cargill Investor Services bought 500 September and sold 200 September and 100 December. Fimat bought 150 September and 150 December and sold 300 September and 100 December. Man Financial bought 400 September and 150 March and sold 100 September and 100 December. Refco bought 150 December and sold 300 September and 100 December as UBS Securities bought 100 December and sold 100 September, 150 December and 200 March.

 

Spot cash U.S. hard red winter wheat basis bids were mixed, cash sources said.

 

 

Minneapolis Grain Exchange

 

MGE September spring wheat futures closed five cents higher at $3.45 1/4 per bushel and the December contract settled up 3 3/4 cents at $3.55 1/4.

 

Prudential Financial and ADM Investor services each bought September and sold December 100 times, and Country Hedging bought September and sold December 500 times.

 

"This is the first time we've seen spread trading like this, so it moved us up a penny," a MGE broker said.

 

ADM Investor Services bought 150 September, Country Hedging bought 50 September and 100 December and sold 150 December, and Cargill Investor Services bought 100 December and sold 200 September.

 

Spot U.S. cash spring wheat basis bids were unchanged to weak, cash sources said.