August 11, 2006

 

US Wheat Review on Thursday: Mostly down; looking to Friday's reports

 

 

U.S. wheat futures ended mostly lower Thursday, falling back in quiet action, as the trade positioned itself ahead of Friday's production, and Supply and demand reports.

 

CBOT September wheat futures ended 1 1/2-cents lower at US$3.86 1/2, September Kansas City wheat settled 2 1/4-cent lower at US$4.69 1/4 and Minneapolis September wheat ended 1/4-cent per bushel higher at US$4.72 1/4.

 

The market took on a wait-and-see approach Thursday, as traders were unwilling to push a risky position ahead of the government's crop reports Friday, analysts said.

 

Overall activity was fairly quiet, with a lack of fresh fundamental news and within expectations weekly export sales failing to pull many traders off the sidelines. The market successfully sustained a sideways theme, plodding along awaiting leadership from Friday's reports, traders added.

 

On tap for Friday U.S. Department of Agriculture is scheduled to release its crop production and supply and demand reports 7:30 a.m. CDT. The average 2006-07 all wheat production estimate was 1.765 billion bushels, 41 million bushels less than the USDA's 1.806 billion estimate in July. The average 2006-07 other spring production estimate was 428 million bushels, 37 million bushels less than the USDA's July estimate of 465 million bushels and well below the 504 million produced in 2005.

 

For durum wheat, the average of 12 analysts surveyed estimate U.S. durum wheat production at 56 million bushels, 4 million bushels below the 60 million bushels estimate in July by the USDA and the 101 million bushels produced in 2005.

 

Meanwhile, some scattered showers and thunderstorms are expected to help re-charge moisture in the southern Plains ahead of winter wheat planting during the first half of next week. However, it is unsure if it will be enough to end dryness concerns, said Meteologix. In CBOT pit trades, Citigroup, RJ O'Brien and Man Financial each bought 300 September. ADM Investor Services and ABN Amro each sold 500 September.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures traded in narrow ranges, struggling amid an absence of fresh news. Many traders were just waiting for tomorrow's reports, said a KCBT broker.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures searched for activity throughout the day, with many participants willing to set on the sidelines ahead of Friday's reports. Traders said hedge pressure was absent with the September/December spread trading between 10 1/2 cents to 11 1/2 cents.