August 29, 2007

 

US Wheat Review on Tuesday: End mixed; consolidates in quiet trade

 

 

U.S. wheat futures ended mixed Tuesday, with futures consolidating in choppy trade amid the lack of fresh inputs heading toward a long holiday weekend, analysts said.

 

December CBOT wheat ended 1/4 cent higher at US$7.38 1/4, December KCBT wheat settled 1 cent higher at US$6.98 1/4, and December MGE wheat finished 1 3/4 cent higher at US$6.79.

 

The market traded both sides of unchanged during the session, as there was an unwillingness among traders to aggressively buy or sell until evidence of the impact of 11-year-high prices has on demand, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

In general there was a lack of new features to spur activity as traders take a breather to assess if demand is beginning to decline at current levels, analysts added.

 

Wheat drifted lower early on the lack of U.S. business in the Egyptian wheat tender, a CBOT floor trader said. Egypt announced it purchased 85,000 metric tonnes of Russian wheat early Tuesday. The absence of other fresh, positive news also limited buying interest after the recent price rally, traders said.

 

In other news, Jordan's Ministry of Trade and Industry said Tuesday it bought 100,000 metric tonnes of Russian wheat in a tender.

 

Meanwhile, the DTN Meteorlogix Weather Forecast said very little rain fell in major international wheat areas of Australia, Argentina, western Europe and Ukraine on Monday. These areas will continue to be dry during the balance of this week. The drier weather is favorable for winter wheat planting in Europe following heavy rains in the last month. However, the other regions are in need of rain - notably Ukraine, where drought has been a prominent weather feature during this entire year.

 

In CBOT pit trades, buyers were lightly scattered among various commission houses, with Fimat a seller of 400 December and MF Global a seller of 200 December.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended mixed, pulling back from opening price strength. The active December futures set new contract highs initially, but buying was quickly exhausted, floor traders said. The market lacked fresh bullish news to extend the advances, analysts added.

 

MF Global, UBS Securities and FC Stonnee were featured flat price players, with Fimat, ADM, JP Morgan, and MF Global active spreaders on the day.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended mixed as well in relatively quiet trade, analysts said. Traders said the biggest feature of the day was liquidation of September futures with September/December spread trading at a 16 cent carry. The bulk of the buying in December was attributed to intra market spreading between Minneapolis and Chicago, a MGE floor broker said. Otherwise, activity was thin, with country movement limited, he added.