US Wheat Review on Wednesday: Closes mostly higher, trades both sides

 

 

U.S. wheat futures settled mostly higher Wednesday after trading both sides, with some support seen from outside markets.

 

Chicago Board of Trade December wheat ended up 1 3/4 cents at US$5.13 a bushel. Kansas City Board of Trade December wheat ended down 1 cent at US$5.24, and Minneapolis Grain Exchange December wheat rose 4 cents to US$5.41 1/4.

 

CBOT wheat managed to extend recent gains but ended well off its highs. The market recovered after temporarily dipping into negative territory on profit-taking following recent rallies, traders said.

 

In early dealings, CBOT December wheat in electronic trading hit a session high of US$5.29 per bushel, its highest price since Aug. 7. Follow-through technical buying helped support the strong early gains, traders said.

 

CBOT December wheat faces resistance at US$5.47 to US$5.48, said Joe Victor, vice president of marketing for Allendale. An overhead target of US$5.76 is the 200-day moving average, but that would be a "pretty staunch brick wall" to bust through, he said.

 

Victor said he thought activity in wheat moving forward was "all predicated on the direction of the corn market." Corn and wheat are linked because funds often trade in a basket of commodities and because both grains can be used for animal feed.

 

 

Kansas City Board of Trade

 

The markets recovered to finish in positive territory, with the exception of KCBT wheat. A trader said it looked as though KCBT might close slightly higher amid support from outside markets but it was unable to shake off all its losses.

 

KCBT December wheat hit a session high of US$5.43. Profit-taking weighed on prices, a trader said.

 

It was encouraging to see a "nice sale" of 200,000 tonnes of U.S. hard wheat to Iraq, Victor said. The U.S. has struggled on the world export market this marketing year due to competition from other countries.

 

After the closing bell, Egypt's state-owned General Authority for Supply Commodities issued a tender to buy 55,000 to 60,000 metric tonnes of wheat on a free-on-board basis for delivery Nov. 16-30 or Dec. 1-15. The markets will keep an eye out for results of the tender Thursday.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed below its session high of US$5.54 1/4. That was its highest price since Aug. 28.

 

Weakness in the U.S. dollar and gains in the stock market added support to the grains, an analyst said. The Dow Jones Industrial Average traded above 10000 for the first time since Oct. 7, 2008, which created a "little bit of optimism" about economic recovery, Victor said.