August 16, 2006

 

US Wheat Review on Tuesday: Up; consolidates prior declines

 

 

U.S. wheat futures ended higher across the board Tuesday, staging a minor bounce, as the market consolidated from prior losses.

 

Chicago Board of Trade September wheat futures ended 2 3/4 cents higher at US$3.76 3/4, September Kansas City wheat settled 5 3/4 cents lower at US$4.49 3/4 and Minneapolis September wheat ended 2 3/4 cents per bushel higher at US$4.53 1/4.

 

At any given time, a market has to unwind oversold conditions, and with speculative fund selling virtually absent, futures found their footing to edge higher, said John Kleist of Kleist Agricultural Consulting.

 

Overall activity was relatively light, with the market presented with little directives to lead prices. The funds seemingly took a break from market, and without spillover pressure from corn and soybeans, futures were absent of negative influences, Kleist added.

 

Meanwhile, talk of recent new swing lows attracting fresh export demand provided underlying strength to aid the firm tonnee, but analysts say confirmation of fresh demand will be needed to sustain any price correction.

 

The rolling of nearby positions and spreads were featured attractions in otherwise featureless trade, pit traders said.

 

In CBOT pit trades, Man Financial bought 1,000 December, and JP Morgan and RJ O'Brien each bought 300 December. Rand Financial and UBS securities each sold 1,000 December, and Calyon Financial sold 600 December.

 

In spreads, Fimat spread 1,000 December/September and Calyon Financial spread 1,000 September/December.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat ended higher across the board in light to moderate trade, with the September/December spread the featured attraction on the day, traders said. A light bounce from previous losses provided strength to flat price action, but without any significant follow-through action, the rolling of spreads emerged as the key focus of traders, a floor broker added. Fimat, Man Financial, and ADM Investor Services were key pit players on the day, sources said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat edged higher in quiet trade. The market encountered an early dead-cat bounce off recent losses, particularly following Monday's firm close, said a MGE floor broker. Activity was fairly subdued, with a little rolling of positions, and inter-market spreads, and buying MGE versus Chicago features. Otherwise, the absence of fresh fundamental news failed to generate strong follow-through buying, with traders say the lack of aggressive selling aided the firm tonnee than any significant buying push, traders added.

 

UBS Securities was a key buyer, while Man Financial was reported a seller on the day.