August 27, 2007

US Wheat Outlook on Monday: Firmer; traders eyeing corn, beans

U.S. wheat futures are seen opening with slight gains Monday, following firmer overnight e-cbot prices. However, expected solid losses in the corn and soybean futures pits could limit buying interest in wheat futures Monday, said an analyst.

In overnight e-cbot trading, December Chicago soft red winter wheat last traded up 1 1/4 cents at US$7.43 1/4.

The world supply and demand balance sheet for wheat remains very tight, said an analyst, adding that will limit downside price pressure in the futures market. But the analyst also warned that "a bull market needs to be fed fresh bullish inputs often." He said there needs to be some fresh, sizeable wheat tenders this week to continue to feed the wheat bulls.

December Chicago wheat prices Friday closed at a fresh contract high close. There are still no early technical clues of a market top being close at hand, said a market technician. The bulls' next upside price objective is to push and close prices above resistance at last week's contract and all-time high of US$7.54 a bushel. The next downside price objective for the bears is closing prices below strong psychological support at US$7.00 a bushel. First resistance is seen at Friday's high of US$7.43 and then at US$7.54. First support lies at Friday's low of US$7.34 and then at US$7.24.

For December Kansas City wheat, prices Friday closed higher and near the session high and closed at a fresh contract high close. The bulls' next upside technical price objective is closing prices above solid resistance at last week's contract high of US$7.00 a bushel. The bears' next downside objective is closing prices below solid support at US$6.70 a bushel. First resistance is seen at the contract high of US$7.00 and then at US$7.10. First support is seen at Friday's low of US$6.84 and then at US$6.80.