July 24, 2009

 

US Wheat Outlook on Friday: Seen steady-up; choppy trading expected

 

 

U.S. wheat futures are poised to start steady to higher Friday, with trading expected to remain choppy and rangebound amid a lack of fresh news.

 

Chicago Board of Trade September wheat is called to open flat to up 2 cents per bushel. In overnight electronic trading, CBOT September wheat closed up 1/4 cent at US$5.32, and CBOT December wheat gained 1 cent to US$5.60.

 

The grains are consolidating a bit after ending higher Thursday, a CBOT floor analyst said. Wheat on Thursday was "dragged along" to the upside by a rally in corn, he said.

 

Fundamentals for wheat continue to look weak, with world supplies considered ample, traders asid. Export demand has been lackluster.

 

"We may just float through Friday," said Larry Glenn, broker and analyst for Frontier Ag. "I don't see us going either direction very far. It will be choppy trading in here. We've got to uncover demand."

 

The next downside price objective for the bears is pushing and closing CBOT December wheat below solid technical support at US$5.38, a technical analyst said. The bulls' next upside price objective is to push and close the contract above solid technical resistance US$5.80, he said.

 

First resistance is seen at US$5.65 3/4 and then at US$5.70. First support lies at US$5.50 and then at US$5.47 1/4, the technical analyst said.

 

KCBT September wheat could uncover additional buying if it pops above US$5.78, Glenn said. The contract overnight was up 1 1/4 cents at US$5.62 3/4.

 

The wheat industry is gearing up for the Wheat Quality Council's annual hard red spring wheat tour, which kicks off next week in Fargo, ND. The tour will survey spring wheat and durum fields and issue yield estimates Thursday.

 

Montana crop areas will continue to trend drier during the next 10 days, increasing stress to the crop, according to DTN Meteorlogix. A favorable weather pattern continues for North Dakota, the private weather firm said.

 

Weather in the Canadian Prairies is expected to trend drier and warmer in the west, which will favor development of crops but also reduce soil moisture. A cool-to-cold weather pattern continues in Argentina, which has been too dry, with little chance for significant rain during the next seven to 10 days, accorindg to Meteorlogix.

 

"Some wheat may have benefited from this week's rainfall but some missed out as well," said Joel Burgio, meteorologist for the weather firm.

 

Very dry conditions continue to impact wheat from western Kazakhstan to the south Urals, but temperatures are not very hot, Meteorlogix said. Friday's long-range charts suggest at least some chance for showers in the region later next week, according to the firm. Spring wheat in Siberia and northeast Kazakhstan will benefit from recent rains and cool conditions, it said.