October 14, 2005

US Wheat Outlook on Friday: Flat-Down 1 cent on technicals, exports

U.S. wheat futures were called to open flat to down 1 cent per bushel Friday in a lingering technical setback from this week's rally on the U.S. Department of Agriculture's lower-than-expected U.S. 2005-06 wheat ending stocks estimate, brokers said.

Disappointing weekly U.S. wheat export sales, at 393,700 metric tonnes, were also expected to weigh on futures, they noted.

U.S. wheat export sales for the week ended Oct. 6 were at the low end of wheat traders' estimates, 25% below the previous week and 42% under the prior 4-week average.

In the overnight e-CBOT session, most-active December wheat at the Chicago Board of Trade closed down 3/4 cent at US$3.42 3/4 after closing Thursday nearer the session low.

"Bulls are struggling a bit," said Jim Wyckoff, a technical analyst. "The Sept. 30 high of US$3.53 is still stiff overhead technical resistance. But it will take a close below US$3.35 1/2 (filling on the downside the upside price gap on the daily bar chart) to provide the bears with fresh downside technical power."

First technical resistance for CBOT December was put at US$3.47-Thursday's high-and then at US$3.50. First support was seen at US$3.42-Thursday's low-and then at US$3.40.

In overnight U.S. wheat export news, Japan bought 10,000 metric tonnes of U.S. hard red winter wheat and 30,000 tonnes of dark northern spring wheat as part of a tender totaling 106,000 tonnes.

The USDA's CCC bought 12,000 metric tonnes of U.S. soft red winter wheat for Mauritania, 3,000 metric tonnes of hard red winter wheat for Madagascar and 20,000 metric tonnes of northern spring wheat for Ghana.

Cash U.S. hard red winter wheat basis bids were steady to weak Friday; soft red winter wheat basis bids were steady to firm, with a 10-cent jump in the Cincinnati, Ohio bid; and U.S. spring wheat basis bids were steady to weak, with a 4-cent drop at Portland, Ore., grain merchandisers said.