August 2, 2007

 

US Wheat Review on Wednesday: Ends higher after weak start on speculative buying

 

 

U.S. wheat futures settled higher Wednesday, rebounding from losses set early in the session on the absence of buying interest as speculators bought wheat near midday reversing price declines, analysts said.

 

CBOT Sep wheat gained 6 cents to US$6.36, KCBT Sep wheat rose 3 1/2 cents to US$6.32 1/2, and MGE Sep wheat settled 5 1/4 cents higher at US$6.32 1/4

 

There was some uncertainty in the market Wednesday and the trade reflected it, said Shawn McCambridge, senior grain analyst at Prudential Financial.

 

Wheat traded both sides of Tuesday's settlement prices with reluctance from buyers to enter into the market leading to an early sell-off, he said. Improving harvest weather in Europe also limited any upside momentum. However, near session lows selling interest was exhausted and spec buying helped the market retrace its losses and move higher, McCambridge added.

 

News that Egypt bought 150,000 metric tonnes of Russian wheat and Iraq's tender for 50,000 metric tonnes shows that end-users are interested in extending coverage even on modest price weakness providing underlying support, he added.

 

Scattered talk that some of the Iraqi tender was filled also underpinned prices, though confirmation of the talk was lacking, an analyst said.

 

Price direction on Thursday will depend on what export sales will be, a commercial-connected analyst said.

 

The U.S. Department of Agriculture is scheduled to release the weekly export sales report Thursday at 8:30 a.m. EDT (1230 GMT). Analysts expect US wheat export sales between 450,000 and 1.2 million metric tonnes for the week ended July 26.

 

On daily open auction technical charts, CBOT Sep settled above its major moving averages after filling to the downside an upside price gap created in last week's trade. In CBOT trades, Fimat bought 3,000 September and sold 1,000 September. JP Morgan bought 500 December and Man Financial sold 1,000 December.

 

Commodity fund buying was estimated at 2,000 contracts.

 

 

Kansas City Board of Trade

 

Hard red winter futures ended higher, shrugging off early losses and following CBOT wheat higher, a floor analyst said. Fimat was noted buying December on the close and Man Financial was also a buyer of December late.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished higher as good scale-down commercial buying at lower levels established early in the session providing underlying support for prices, an MGE trader said. CBOT wheat rallied and spring futures followed Chicago higher, the trader said.