September 9, 2006

 

US Wheat Review on Friday: Consolidates lower; lacks fresh demand news

 

 

U.S. wheat futures ended lower across the board Friday, consolidating prior gains on light speculative selling amid the absence of fresh demand news.

 

December CBOT wheat ended 4 3/4 cents lower at US$4.15 1/2, December KCBT wheat settled 3 3/4 cents lower at US$4.80 1/4, and December MGE wheat finished 3 1/4 cents lower at US$4.61 3/4.

 

The lack of demand news coupled with opportunities for beneficial rains in the winter wheat belt with plantings just around the corner set the stage for prices drift lower, said Bill Nelson, associate vice president with A.G. Edwards in St. Louis, Mo.

 

The market evened up a few positions ahead of the weekend and next week's supply and demand reports, as traders grow tired of awaiting news of potential demand from India, analysts said.

 

The improved rain potential for the winter wheat belt is fundamentally bearish for the market, and without some demand news to feed market bulls, it's hard to sustain a bullish tonnee, added Nelson.

 

Futures garnered price strength on carryover momentum from Thursday's rebound. However, after the early buying interest was exhausted, prices drifted lower as traders took some profits ahead of the weekend, floor traders said.

 

Meanwhile, the DTN Meteorlogix forecast said U.S. southern Plains wheat areas will have widespread rainfall developing through the weekend. The heaviest rainfall of up to 1 1/2 inches will occur from southern Nebraska through most of Kansas. Up to one inch of rain is in store for eastern Colorado through the Texas and Oklahoma panhandles. The remainder of Oklahoma through north-central Texas will have rainfall of up to one-half inch, Meteorlogix reports.

 

Major winter wheat areas of Argentina and Australia remain dry, Meteorlogix reports. During the next five days, Australia will have up to one-half inch of rain in the western regions of the country, but only scattered light showers in the east. All areas will be dry following Monday. Argentina's southern wheat sector will have no significant rainfall during the next week. A few showers may develop by the end of next week in the northern portion of the winter wheat area.

 

In CBOT pit trades, Fortis, RJ O'Brien, Tenco and USA were featured buyers. Calyon Financial, UBS Securities, ABN Amro, Fimat and Man Financial were key sellers.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat trading was quiet with pre-weekend profit- taking a feature in thin trade, traders said. ADM Investor Services, Country Hedging, Fimat and Frontier Futures were featured players over the course of the session.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE spring wheat futures were followers of the other wheat markets once again, with disappointment over poor spring wheat export sales limiting buying interest, analysts said.

 

Meanwhile, light support was generated from commercial buying after the December contract held technical support, traders said.