September 8, 2006

 

US Wheat Review on Thursday: Up; Recovers on tech buys, world crop lssues

 

 

U.S. wheat futures ended higher across the board Thursday, recovering from Wednesday's declines, with spillover strength from corn and world supply concerns providing support.

 

December Chicago Board of Trade wheat ended 3 1/4 cents higher at US$4.20 1/4, December Kansas City Board of Trade wheat settled 6 1/2 cents higher at US$4.84, and December Minneapolis Grain Exchange wheat finished 2 cents higher at US$4.65.

 

The market climbed in what would have to be termed a technical atmosphere, bouncing back from Thursday's losses, as the market continues to deal with falling world production outlooks, said Tanner Ehmke, analyst with AgResource Co. in Chicago.

 

Positive technical signals served as a catalyst to ignite buying with the ability of Kansas City and Chicago wheat to climb above moving-average resistance coupled with borrowed momentum from corn and soybeans attracting speculative buying, traders added.

 

However, the market has reached an area where upside movement has failed previously and with a lot of the world crop concerns already reflected in prices, futures will need fresh demand news to sustain the rally, said John Kleist of Top Third Ag Marketing in Chicago.

 

Overall the market is still in a subdued mode, awaiting news on tenders from Iraq and India, added Ehmke.

 

On tap for Thursday, U.S. Department of Agriculture is scheduled to release its weekly export sales report Friday 7:30 a.m. CDT. Analysts surveyed by Dow Jones Newswires anticipate commitments in a range of 300,000 to 500,000 metric tonnes.

 

The DTN Meteorlogix forecast said Southern Plains wheat will have rainfall develop in the region bringing some precipitation to a wide area. The rainfall potential for this weekend in the southern Plains is up to one inch, with some heavier amounts locally. Coverage will be widespread. The moisture will be beneficial to winter wheat's early growth.

 

In South America, Argentina's wheat belt remains in the grip of a very dry weather pattern. There is no significant rainfall in store for the wheat belt over the next five days. Dry-weather stress continues in the Argentina wheat regions, Meteorlogix reports.

 

In CBOT pit trades, Rosenthal bought 1,000 December and ABN Amro bought 400 December. ABN Amro was a seller of 3,000 December with widely scattered selling reported from various firms.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures scored technical gains Thursday, trading an outside higher day on technical charts basis the active December contract. The ability of active contracts to bounce above resistance at their 10-day and 20-day moving averages provided a spark to lift prices. Linger world crop concerns provided fundamental strength as selling pressure waned after midday, traders said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended Thursday's session posting modest gains, managing to recover from early losses on borrowed strength from KCBT and CBOT wheat. Traders say a lack of fresh fundamental news for spring wheat futures and its inability to push above technical resistance kept the market in the role of a follower.