July 27, 2006

 

US Wheat Review on Wednesday: Wheat futures falter; CBOT sags late

 

 

U.S. wheat futures settled lower Wednesday, pressured by an early and late round of fund selling at the Chicago Board of Trade and fund liquidation and technical selling in spring wheat futures at the MGE, sources said.

 

Light fund selling at the open helped CBOT futures work their way lower early in the session with a continued lack of buying interest limiting the upside, sources said.

 

The recent supply bull rally has topped out with nothing to replace it, said John Kleist of Kleist Ag Consulting in Arlingtonne Heights, Ill. The market has been acting heavy on the lack of export demand, he added.

 

Fund selling late in the session with the lack of any buying interest pushed CBOT wheat to session lows on the close.

 

On day only technical charts, CBOT September fell to its lowest levels since June 26 and settled below its 100-day moving average.

 

CBOT September wheat declined 11 1/4 cents to US$3.82 per bushel and December dropped 9 1/4 cents to US$4.04 1/4.

 

In CBOT trades, Rosenthal bought 600 September, Man Financial purchased 600 September and 300 December and JP Morgan bought 300 September.

 

Calyon Financial sold 700 September, Man Financial sold 500 September, Citigroup sold 400 September and Prudential Financial sold 300 September.

 

Commodity fund selling was estimated at 2,400 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures remained in their recent role as a follower of the other markets and finished lower in light trading activity, a KCBT floor analyst said.

 

Overall, volume was very light and the day passed by with hard red futures following spring wheat in Minneapolis and Chicago futures, the analyst noted.

 

KCBT September lost 7 1/2 cents to US$4.82 per bushel, trading at its lowest level in a week and December fell 10 1/2 cents to US$4.94 1/2.

 

On day only technical charts, both KCBT September and December remained above their 100-day and 200-day moving averages.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures settled lower, dragged down by wholesale fund liquidation, an MGE floor source said. The fund selling ran into sell stops, adding to the declines, he added.

 

September filled on the downside an upside price gap created on June 27.

 

Fund selling was estimated at 2,000 contracts, sources said.

 

On day only technical charts, both September and December settled below their 40-say, and 50-day moving averages.

 

MGE September wheat settled 10 3/4 cents lower to US$4.75 3/4 per bushel and December dropped 12 1/4 cents to US$4.82 3/4.

 

On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales report at 7:30 a.m. CDT. Analysts expect sales between 300,000-400,000 for the week ended July 20. Sales for the week ended July 13 totaled 329,200 tonnes.