U.S. wheat futures are expected to rise at the start of Monday's day session on weakness in the U.S. dollar and support from strength in other markets, traders said.
Chicago Board of Trade December wheat is called to open 3 to 5 cents per bushel higher. In overnight electronic trading, CBOT December wheat was up 5 1/2 cents to US$5.53 1/4.
Weakness in the U.S. dollar and expected gains in CBOT corn and soybeans should help create a positive tone for wheat, traders said. Wet weather continues to look unfavorable for the U.S. corn and soybean harvests and for soft red winter wheat planting, analysts said.
Producers in the Midwest and South often plant SRW wheat after soybeans but can't put it in the ground until the soybeans come out. Wet weather has slowed harvest to its slowest pace in at least 20 years, analysts said.
"Rain, thunderstorms, wind and some snow will likely mean continued harvest delays for the Midwest region during the last part of this week," according to private weather firm DTN Meteorlogix.
However, the bullish weather may already be priced into the wheat market after CBOT July wheat briefly traded above its 200-day moving average last week, said Mike Zuzolo, analyst for Global Commodity Analytics & Consulting. The July wheat contract represents the new crop.
The U.S. Department of Agriculture is due to issue an update on winter wheat seedings at 4 p.m. EDT Monday in its weekly crop progress report. A week ago, winter wheat was 69% planted, below the average of 78%.
It was technically bearish for CBOT wheat to close lower Friday after hitting a fresh recent high, an analyst said. The "negative technical signals" need to be negated with gains early this week or technical selling will return before the weekend, he said.
The bulls still have upside near-term technical momentum to suggest that a market low is in place and that prices can continue to trend higher, a technical analyst said. The next downside price objective for the bears is pushing and closing CBOT December wheat below solid technical support at US$4.95 1/2, he said. Bulls' next upside price objective is to push and close the contract above solid technical resistance at the August high of US$5.85, he said.
First resistance is seen at US$5.50 and then at US$5.55 3/4, the technical analyst said. First support lies at US$5.40 and then at US$5.33 1/2, he said.
Non-commercial speculative funds trimmed their net short position in CBOT wheat to 37,592 contracts as of Oct. 20, according to a supplemental report from the Commodity Futures Trading Commission. A week earlier, they were net short 47,603 contracts.
In other news, the export front remains quiet for U.S. wheat, traders said. The Philippines last week bought 133,000 tonnes of feed-grade wheat from Ukraine, an industry executive said Monday.
