August 28, 2007

 

US Wheat Review on Monday: Modest losses on profit-taking pressure

 

 

U.S. wheat futures closed slightly to modestly lower Monday, pressured by a lack of fresh bullish fundamental inputs and some profit-taking pressure from recent strong gains, said an analyst.

 

Chicago Board of Trade December wheat futures closed down 4 cents at US$7.38 a bushel.

 

Kansas City Board of Trade December futures closed down 3/4 cent at US$6.97 1/4.

 

Minneapolis Grain Exchange December wheat closed down 6 cents at US$6.77.

 

After last week's run to fresh contract and all-time highs in Chicago wheat, traders decided to take a rest day Monday and take some profits, said the analyst. He added that trading action the rest of this week, ahead of the final U.S. holiday of the summer - Labor Day - this coming weekend, is likely to see more of the same quieter trading activity.

 

The weaker corn market Monday also limited buying interest in wheat futures.

 

"The (wheat) market remains supported by strong export sales against the backdrop of lower-than-expected production in Canada and Europe," said a brokerage analyst. He added that major wheat growing areas of southwestern and southeastern Australia are also experiencing dry conditions that are hampering the wheat crops in those regions.

 

 

Chicago Board of Trade

 

Technical support for December wheat futures is located at Monday's low of US$7.34 and then at US$7.25. Resistance is seen at Monday's high of US$7.43 and then at the contract and all-time high of US$7.54. Prices remain in a solid uptrend with no technical clues of a market top being close at hand, said a market technician.

 

 

Kansas City Board of Trade

 

Hard red winter wheat futures are also in a strong uptrend on the daily bar chart, with no signs of a market top close at hand, said the technician. Resistance for December futures is seen at the contract high of US$7.00 and then at US$7.10. Support is seen at Monday's low of US$6.93 and then at US$6.84.

 

 

Minneapolis Grain Exchange

 

December futures find chart support at US$6.70 and then at US$6.66. Resistance is located at Monday's high of US$6.82 and then at the contract high of US$6.88. While the uptrend in hard red spring wheat remains in place, it is not as strong as the near-term price uptrends in hard red and soft red winter futures markets, said the market technician.