August 22, 2006

 

US Wheat Review on Monday: End mixed; spreads featured

 

 

U.S. wheat futures ended mixed Monday, with inter-market spreads between each of the markets promoting the differences in direction.

 

Chicago Board of Trade September wheat futures ended 1 1/4 cents higher at US$3.65 3/4, September Kansas City wheat settled 1/2 cent lower at US$4.53 3/4 and Minneapolis September wheat ended 2 cents per bushel lower at US$4.46 1/2.

 

The mixed tonnee was reflective of the absence of fresh fundamental influences to provide clear direction, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

As the market has done so many times, rumors of export business bounce prices higher, but without any confirmation of strong demand, with only token amounts reported, futures have a tough time sustaining upside movement, added McCambridge.

 

Talk of Brazil looking to purchase U.S. wheat and news that India will need to import more wheat provided support to put a floor under the market, traders said.

 

Futures initially edged higher on carryover buying from Friday, but without solid follow-through support, downside movement remains the path of least resistance, analysts said.

 

CBOT wheat managed to stay firm for most of the day, with a bounce from new swing lows and spreading between markets serving as the catalyst for the gains, traders said.

 

Meanwhile, mild pressure was exerted from rain showers moving through the hard red winter wheat belt, providing soil moisture in a prelude to plantings in a few weeks, said Bill Nelson, associate vice president at A.G. Edwards and Sons in St. Louis.

 

The DTN Meteorlogix forecast calls for rainfall of up to one inch from southwestern Nebraska south to the Texas Panhandle before the showers move out of the region on Wednesday. The rain is providing soil moisture for winter wheat planted this fall to use in its early growth stages.

 

In CBOT pit trades, Fimat bought 1,000 December, O'Connor bought 500 December and Rand Financial bought 300 December. Calyon Financial and Fimat each sold 500 December, with JP Morgan a seller of 300 December.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat ended mixed, following a two sided session.

 

The absence of confirmed export business managed to stem bullish enthusiasm, but without any additional influences, futures managed to end mostly higher on demand prospects.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures stumbled lower Monday, succumbing to spreading pressure, with the absence of new supportive features leaving futures grinding lower in quiet trade.

 

Aside from inter-market spreads, the rolling of positions with the September/December spread was a featured attraction.