September 21, 2006

 

US Wheat Outlook on Thursday: Steady-up 1 cent on overnight, export sales

 

 

Traders and analysts expect U.S. wheat futures to open steady to 1 cent a bushel higher Thursday after a mixed overnight trade and on export sales that topped trade estimates, sources said.

 

In e-cbot trade basis December contracts, Chicago Board of Trade wheat was up 1/4 cent at US$4.08, Kansas City Board of Trade wheat was down 1/4 cent at US$4.76 and Minneapolis Grain Exchange wheat was up 3/4 cent to US$4.56 1/2.

 

Export sales for the week ended Sept. 14 were 515,500 metric tonnes, 54% above the previous week's 337,300 tonnes and up 34% from the previous four-week average, the U.S. Department of Agriculture said. Traders had expected sales in a range of 350,000-500,000 tonnes.

 

The largest sales increases were attributed to Egypt at 175,000 tonnes, Japan with 109,500 tonnes and Mexico at 71,800 tonnes.

 

Total shipments were 528,900 tonnes, the USDA said.

 

Export commitments for 2006-07 total 9.736 million tonnes, down from 12.669 million at the same time last year.

 

Corn futures are called to open steady to slightly higher on firm export sales and rainy weather slowing down the early harvest. This may provide a bit of spillover support for wheat, a trader said.

 

Showers and thunderstorms will develop Thursday across the central and southern U.S. Plains, bringing 0.25-1.25 inches of rain and locally heavier amounts. Mostly dry conditions with a few late-day showers are expected on Friday, with showers likely redeveloping on Saturday, DTN Meteorlogix said.

 

The rains will slow the hard red winter planting pace further, but will provide needed moisture for newly planted crops and recharge soil moisture levels.

 

Traders are also hoping that Iraq will buy wheat from the U.S., with an Iraqi wheat trade delegation currently in the country and scheduled to meet with agriculture and industry officials next week. Rumors are circulating that Iraq may purchase as much as 1.5 million tonnes on the world market.

 

In other news, Ukraine will likely export 11.2 million metric tonnes of grain in 2006-07, 1.6 million tonnes from last year, the government said. The total 2006 grain harvest is pegged at 37.6 million tonnes, versus 38.02 million in 2005.

 

Russia's wheat exports in July-August totaled 1.86 million tonnes, down 11% from the 2.09 million tonnes in the same period last year, the government said.

 

In other export news, Japan bought 95,000 metric tonnes of milling wheat Thursday, which included 50,000 tonnes U.S. wheat, comprised of 25,000 tonnes of hard red winter and 25,000 of dark northern spring wheat. The rest of the tender included 20,000 tonnes Canadian and 25,000 tonnes Australian wheat. Shipment is scheduled for Nov. 1-30.