July 21, 2006

 

US Wheat Review on Thursday: Ends higher, led by funds, technicals

 

 

U.S. wheat futures settled with strong gains Thursday as fund and technical buying pushed prices higher, sources said.

 

The funds bought wheat and as the market moved higher, it touched off technical buy stops and extended its gains, a Chicago Board of Trade floor analyst said.

 

Concerns over hot and dry weather in wheat producing regions in France, Canada and Australia added to the firm tonnee, a commission house broker said.

 

There was not much interest in selling wheat Thursday, the analyst added.

 

Weekly export sales were 328,200 metric tonnes according to the U.S. Department of Agriculture, within the range expected by analysts.

 

A source said that although the overall sales total was modest, soft red wheat sales at almost 25% of the total were encouraging.

 

Light wheat-corn spreading was also supportive to the market, a floor trader said.

 

CBOT September wheat jumped 13 1/2 cents to US$4.06 1/2 per bushel, and December rose 11 3/4 cents to US$4.24 1/2.

 

On day-only technical charts, CBOT September futures ended above most major moving averages and settled at their highest level since July 12.

 

In CBOT trades, ABN Amro bought 1,000 September, Fimat bought 1,000 September, Goldenberg-Hehmeyer bought 1,200 September, O'Connor bought 1,000 September, and Prudential Financial bought 800 September.

 

Man Financial sold 1,000 September, and Fimat sold 500 September.

 

Commodity fund buying was estimated at 6,000 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures finished higher, following the theme established at the CBOT as fund and technical buying led futures to the upside, a commission house broker said. The funds came in and bought it, pushing the market into technical buy stops, and there wasn't much interest in selling, he noted. Concerns about hot and/or dry conditions in France, Canada and Australia added to the strong tonnee, he noted.

 

In KCBT trades, Man Financial, JP Morgan and ABN Amro were noted as buyers.

 

KCBT September rallied 15 1/2 cents to US$5.02 1/2 cents per bushel, and December jumped 15 cents to US$5.17 1/2.

 

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

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended higher, following the gains in KCBT and CBOT futures as the market lacked any feature, an MGE floor source said.

 

Continued dry conditions in the northern U.S. spring wheat belt is well known and did not have much of an impact, he added.

 

Futures gave back some of their gains near midday before late gains in the other markets supplied additional support, he said.

 

MGE September wheat gained 8 3/4 cents to US$5.04 1/4 per bushel, and December rose 9 1/2 cents to US$5.09.

 

Minneapolis grain receipts totaled 105 cars of wheat and 87 cars of durum, compared to 101 cars of wheat and 86 cars of durum a year ago.

 

On Friday afternoon, the Commodity Futures Trading Commission is scheduled to release the weekly Commitments of Traders Report for the period ending July 18.