July 28, 2007

 

US Wheat Review on Friday: Mostly higher; good week for bulls

 

 

U.S. wheat futures prices at the three major U.S. grain exchanges closed mostly higher Friday, near their session highs and closed at or near weekly high closes. Profit-taking pressure early on gave way to fresh speculative buying interest late in the session, to push prices to session highs, said an analyst.

 

Chicago Board of Trade September wheat futures closed up 2 1/4 cents at US$6.53 1/4 a bushel. December futures closed steady at US$6.69 a bushel.

 

Kansas City Board of Trade September wheat futures closed up 2 1/2 cents at US$6.44 and December futures closed up 5 1/4 cents at US$6.58 3/4.

 

Minneapolis Grain Exchange September wheat closed down 1/2 cent at US$6.45 1/2 while December closed up 1/4 cent at US$6.57 1/4.

 

Selling interest in wheat futures on Friday was also limited on a fresh USDA U.S. export sale to Iraq, announced Friday morning.

 

It was a good week for the wheat market bulls. Prices on Thursday set fresh contract highs in all three wheat market classes. This week's strong U.S wheat export demand pace, highlighted by Thursday's weekly USDA sales report that showed U.S. export sales above 2 million metric tonnes and the highest weekly sale level in 10 years, was just one more bullish fundamental added to what has been a major bull market run in wheat futures.

 

However, warned one brokerage analyst, "If end-users are front-loading this market, prices may have to move lower later in the year to return some of the lost demand back to the market."

 

After sampling fields in North Dakota, South Dakota and Minnesota, crop scouts on the Wheat Quality Council HRS tour, which ended Thursday afternoon, found an average yield of 37.3 bushels per acre, which is up from 31.7 bushels per acre in 2006 and the 5-year average of 35.1 bushels per acre. Unless late-season weather is adverse, crop scouts feel this year's spring wheat crop will be above average.

 

 

Chicago Board of Trade

 

Soft red winter wheat bulls still have the solid upside technical advantage, with price action Friday closing near the weekly high close. There are no 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$6.78 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 would fill on the downside the upside price gap created on the daily bar chart this week. First resistance is seen at Friday's high of US$6.71 and then at the contract high of US$6.78. First support lies at Friday's low of US$6.61 and then at US$6.57.

 

 

Kansas City Board of Trade

 

December K.C. HRW wheat on Friday closed at the weekly high close and closed at a fresh contract high close. Bulls still have the strong technical advantage amid no signs of a market top. The bulls' next upside price objective is closing prices above solid resistance at the contract high of US$6.68 1/2 a bushel. The bears' next downside objective is closing prices below solid support at US$6.26 a bushel, which would fill on the downside this week's upside price gap on the daily chart. First resistance is seen at Friday's high of US$6.60 1/2 and then at the contract high of US$6.68 1/2. First support is seen at Friday's low of US$6.51 and then at US$6.44 1/2.

 

 

Minneapolis Grain Exchange

 

Technically, December hard red spring wheat futures Friday closed near the session high, at the weekly high close and at a fresh contract high close. Bulls still have the solid upside technical advantage, said the market technician. The next upside price objective for the HRS bulls is to produce a close above solid chart resistance at the contract high of US$6.68. The next downside price objective for the bears is to produce a close below solid support at US$6.38, which would fill on the downside the upside price gap created this week on the daily bar chart. First resistance is seen at Friday's high of US$6.59 and then at US$6.68. First support is seen at US$6.50 and then at US$6.43.