US Wheat Review on Wednesday: Mostly higher on short covering, technical buys

 

 

Short covering and technical buying pushed most U.S. wheat futures higher Wednesday, despite a lack of supportive fundamental news.

 

Chicago Board of Trade December wheat ended up 4 1/4 cents to US$4.60 a bushel, while Kansas City Board of Trade December wheat settled 1 1/4 cents higher at US$4.69 1/4. Minneapolis Grain Exchange December wheat ended 1 1/4 cents lower at US$4.89 1/2.

 

CBOT December wheat bounced after taking out a double bottom in the low US$4.50s, a CBOT floor analyst said. The contract in open outcry trading hit a session low of US$4.51 a bushel, below recent lows of US$4.52 and US$4.53. The move did not uncover sell stops, so disappointed shorts covered their positions, the floor analyst said.

 

"We went down below the lows and we were able to hold," said Bryce Knorr, market analyst for Farm Futures. "That seems to be triggering some short covering. We're getting halfway decent volume for a change."

 

It will be difficult for wheat to extend its gains amid bearishness about large world supplies, analysts said. Wheat could find some technical support if it is able to hold the bottom of its recent consolidation range and find some spillover support from other markets, Knorr said.

 

"We've had a couple of bullish reversals, trying to get things going, and we haven't been able to sustain it yet," he said. "If you can juggle about 15 balls in the air, you might get something. The market is so beat up, if it can hold the bottom of the consolidation range that it's been in the last two to three weeks, you might be able to get some type of bounce."

 

 

Kansas City Board of Trade

 

KCBT wheat rose in a technical bounce from recent losses, traders said. The market was "obviously oversold and due for some kind of a bounce," an analyst said.

 

Supportive fundamental news continued to be scare, analysts said. The production outlook for the Southern Hemisphere looks a bit brighter due to moisture, they said.

 

Dry growing areas of Argentina are expected to see some rain this weekend, according to DTN Meteorlogix. There are lingering concerns about dryness in Australia, but world wheat supplies are comfortable.

 

"Fundamentally there doesn't appear to be any real news out there," Knorr said. "There's still a lot of wheat around."

 

 

Minneapolis Grain Exchange

 

MGE wheat finished slightly lower. The market had trailed the CBOT and KCBT during the session. Traders are keeping an eye on the U.S. advancing spring wheat harvest.

 

Traders are waiting to see the U.S. Department of Agriculture's weekly export sales report, due out at 8:30 a.m. EDT Thursday. Analysts expect wheat sales to be 300,000 to 500,000 tonnes.