August 15, 2006

 

US Wheat Review on Monday: Most lower, long liquidation pressure

 

 

U.S. wheat futures ended mostly lower Monday, continuing their setback from prior levels, as carryover weakness from Friday's crop reports continued to attract speculative long liquidation pressure.

 

Chicago Board of Trade September wheat futures ended 1/4 cent higher at US$3.74, September Kansas City wheat settled 10 1/4 cents lower at US$4.44 and Minneapolis September wheat ended 6 1/2 cents per bushel lower at US$4.50 1/2.

 

Speculative-led selling was the feature across all wheat markets, as the heavy buildup of long positions in the market sent buyers running for cover once underlying support levels were breached, analysts said.

 

The absence of any supportive fundamental news to offset the bearish tonnee, with weakness in the other grains and oilseeds for most of the day helping keep prices pinned in negative territory, traders added. However, light Chicago/Minneapolis wheat spreading did provide mild strength to lift the nearby CBOT September futures to a marginal gain, a trader added.

 

Kansas City and Minneapolis wheat futures were the downside leaders on the day, with fund selling key, as the markets downward moves activated sell stops, traders said. MGE spring wheat futures followed the same path as KCBT wheat, but light commercial buying at the lows of the session did manage to temper the declines, traders added.

 

The U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 3 p.m. CDT. This afternoon's crop progress report is expected to show 60% of the spring wheat crop has been harvested, analysts said.

 

In CBOT pit trades, Iowa Grain bought 500 December, JP Morgan bought 600 December and Fimat bought 300 December. O'Connor sold 1,500 December, and Citigroup sold 1,000 December. Man Financial was a seller of 600 September, with JP Morgan, RJ O'Brien and Rosenthal each sellers of 300 December.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures stumbled to 3-month lows. The market continued to clear out weak longs amid the market's heavy buildup of longs in the absence of fresh supportive news, analysts said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat fell in unison with KCBT wheat, with favorable weather conditions for harvest and reports of better quality and higher yields attracting sellers, with buyers on the run, traders said.

 

The nearby September futures fell to an eight-week low before selling pressure was exhausted, allowing futures to produce a midrange settlement.