US Wheat Review on Thursday: Climb continues on fund, technical buying

 

 

U.S. wheat futures extended gains Thursday on fund and technical buying and led the upside in grains and soy.

 

Chicago Board of Trade December wheat ended up 9 1/4 cents at US$5.51 3/4 a bushel. Kansas City Board of Trade December wheat gained 7 cents to US$5.53, and Minneapolis Grain Exchange December wheat added 7 cents to US$5.60 1/4.

 

Non-commercial speculative funds hold a large net short position in CBOT wheat, which opens the door for short-covering rallies, traders said. Commodity funds bought an estimated 6,000 wheat contracts at the CBOT.

 

"I would have thought corn and beans would be leading the market, but wheat is the one everybody's short," said Mike Krueger, president of the Money Farm. "For months, they sold wheat against everything out there."

 

CBOT December wheat closed near its session high of US$5.55 3/4, which was its highest price since Aug. 6. The contract topped Wednesday's high of US$5.48 1/2, its recent high.

 

There was follow-through buying after CBOT December wheat ended above its 100-day moving average Wednesday. The contract's upside price target is seen at US$5.60 to US$5.80, although it's hard to pick target levels because the markets aren't trading fundamentals, an analyst said.

 

There are some worries about delayed plantings of U.S. soft red winter wheat due to the slow corn and soy harvest, although large world supplies make the late planting less of a concern, analysts said. Producers plant some SRW wheat after soy in the Midwest and south, but wet weather has delayed the harvest.

 

 

Kansas City Board of Trade

 

KCBT wheat rose on technical buying, as CBOT wheat led the markets higher, an analyst said. The markets found that "the bulk of (support) is still short-covering in Chicago," Krueger said.

 

Total weekly U.S. wheat export sales of 685,100 tonnes were "good" and above trade expectations, an analyst said. The business included a previously announced sale of 200,000 tonnes of hard red winter wheat to Iraq.

 

KCBT December wheat closed near its session high of US$5.56. That was a fresh high for the contract since Aug. 7.

 

 

Minneapolis Grain Exchange

 

MGE wheat closed higher on technical and follow-through buying, traders said. The December contract hit a session high of US$5.64, its highest price since Aug. 25.

 

"You're getting a lot of technical buying coming in," an analyst said.