July 26, 2007

 

U.S. Wheat Review on Wednesday: Modest losses on correction, profit taking

 

 

U.S. wheat futures closed modestly lower and nearer their session lows Wednesday, on a mild corrective profit-taking pullback from the strong gains posted on Tuesday. Chicago Board of Trade September wheat futures closed down 8 cents at US$6.34 a bushel. December futures closed down 6 1/2 cents at US$6.52 1/2 a bushel.

 

Kansas City Board of Trade September wheat futures closed down 3 1/4 cents at US$6.26 3/4 and December futures closed down 3 1/2 cents at US$6.42.

 

Minneapolis Grain Exchange September wheat closed down 6 1/4 cents at US$6.37 and December closed down 6 1/4 cents at US$6.47.

 

All three major wheat futures market prices posted contract high closes on Tuesday, amid bullish fundamentals that include hot and dry weather presently enveloping U.S. spring wheat country and the very recent heavy rains that have robbed yield potential from major European Union growing areas.

 

Wheat traders are anticipating Thursday morning's weekly USDA export sales report. Traders expect that report to favor the bullish camp, amid a recent pick-up in export demand for U.S. wheat.

 

While recent heavy rains in European Union wheat regions have likely reduced production potential, concerns in the wheat market are mounting regarding the condition of the spring wheat crop in the northern U.S. Plains states. The latest National Weather Service 6-10 day forecast for July 30 to Aug. 3 calls for above-normal temperatures over much of the U.S. midsection, with the warmest readings expected in north-central areas - spring wheat country. Heat indexes of above 100 degress have been reported in Nebraska and South Dakota this week.

 

Crop scouts on the second day of the Wheat Quality Council HRS wheat tour through North Dakota, South Dakota and Minnesota are still seeing crops in generally good condition, with minimal disease and insect problems, reported Dow Jones reporter Tom Polansek, who is participating in this year's tour. Monday's crop samplings also saw a wheat crop that is in better condition than last year's tour findings. Tour sampling will continue Thursday and end in Fargo, N.D., with a final yield estimate to be issued around 3:30 p.m. EDT Thursday.

 

 

Chicago Board of Trade

 

Technically, December Chicago SRW wheat bulls still have the solid upside technical advantage, amid no early warning signs of a market top being close at hand, said a market technician. The bulls' next upside technical price objective is to close prices above resistance at the contract high of US$6.64 a bushel. The next downside price objective for the bears is closing prices below strong support at US$6.38 1/2 a bushel, which is the bottom of Tuesday's upside price gap on the daily bar chart. Chart resistance is located at Wednesday's high of US$6.57 1/2 and then at US$6.64. Support is located at Wednesday's low of US$6.48 and then at US$6.38 1/2.

 

 

Kansas City Board of Trade

 

Techncially, December K.C. HRW wheat bulls' next upside price objective is closing prices above solid resistance at the contract high of US$6.49 a bushel. The bears' next downside objective is closing prices below solid support at US$6.18 1/2 a bushel, which is the bottom of Tuesday's big upside price gap on the daily bar chart. Chart support is located at US$6.36 and then at US$6.30. Resistance is located at Wednesday's high of US$6.44 1/2 and then at US$6.49. Support is seen at US$6.36 and then at US$6.31.

 

 

Minneapolis Grain Exchange

 

Technically, December HRS bulls find the next upside price objective is closing prices above solid resistance at the contract high of US$6.58 1/2. The next downside price objective for the bears is closing prices below solid support at US$6.38, which is the bottom of the upside gap on the daily bar chart, created Tuesday. Chart resistance is located at Wednesday's high of US$6.52 and then at the contract high of US$6.58 1/2. Support is seen at US$6.43 and then at US$6.38.