July 20, 2006

 

US Wheat Review on Wednesday: Finishes lower but trims early declines

 

 

U.S. wheat futures finished lower Wednesday, but well above earlier levels as late buying interest in hard red and spring wheat futures helped trim losses at the KCBT and MGE, while spillover strength from corn futures helped trim the losses at the CBOT, sources said.

 

Early in the session inter-market spread unwinding pressured wheat futures in Kansas City and Minneapolis and provided some support to Chicago futures, sources said.

 

Technical and speculative selling, thought to be commodity funds, also weighed on prices in KC and Minneapolis, sources there said.

 

However, a lack of additional selling at the lows of the day helped hard red futures in KC and spring wheat in Minneapolis recover from lows late, traders said.

 

CBOT September wheat fell 5 cents to US$3.93 per bushel, and December lost 4 1/2 cents to US$4.12 3/4.

 

In CBOT trades, UBS bought 1,200 September, Goldenberg-Hehmeyer bought 900 September, O'Connor bought 500 September and Ran bought 300 September.

 

Rosenthal sold 800 September, Man Financial sold 300 September and Citigroup sold 300 September.

 

Commodity fund buying was estimated at 1,200 contracts.

 

On technical charts, September finished beneath its 10-day, 20-day and 40-day moving averages.

 

 

Kansas City Board of Trade

 

KCBT wheat futures settled lower as the inter-market spread unwinding and fund selling helped push futures to moderately lower levels early in the session, a commission house trader said. Near the lows of the day, selling interest dried up, and light commercial buying and local short covering emerged to trim the losses, he added.

 

In midday KCBT trades, Prudential Financial bought 600 December and sold,500 September, UBS bought 1,200 September and 500 December, while selling 300 December.

 

KCBT September settled 3 1/4 cents lower to US$4.87 cents per bushel, and December slipped 2 cents to US$5.02 1/2.

 

On day only technical charts, September settled beneath its 10-day, 20-day, 40-day and 50-day moving averages.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished lower as spread unwinding kept prices on the defensive, sources said. Speculative liquidation added to the early losses, with a floor trader also noting technical selling.

 

Open interest is very large and the funds are liquidating some of their positions, an MGE commission house analyst said.

 

Losses were trimmed after midday as selling interest dried up, leading to some position squaring, sources said.

 

Midday weather forecasts predicting drier weather in parts of the U.S. Northern Plains also helped prices recover, an analyst said.

 

Minneapolis grain receipts totaled 37 cars of wheat and one car of durum, compared to 46 cars of wheat and 52 cars of durum a year ago.

 

MGE September wheat settled 4 1/2 cents lower at US$4.95 1/2 per bushel, and December fell 7 cents to US$4.99 1/2

 

On day only technical charts, September settled below its 10-day and 20-day moving averages but above the 40-day and 50-day averages.

 

Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report. Analysts expect sales between 250,000-350,000 metric tonnes for the week ended July 13, following sales of 201,200 tonnes for the week ended July 6.