October 28, 2005

 

US Wheat Review on Thursday: Ends firm, led by kansas city board of trade on demand, stops

 

 

U.S. wheat futures settled mostly up Thursday, led by gains in high-protein Kansas City Board of Trade and Minneapolis Grain Exchange wheat on late technical buying and good global demand, as seen in this week's rumored 1-million-metric-tonne sale to Iraq, brokers said.

 

The sale wasn't confirmed Thursday by the U.S. Department of Agriculture; and the two companies reported to be selling the U.S. grain declined to comment.

 

However, U.S. cash and futures wheat traders said they believed the business was done and would cut U.S. 2005-06 high protein hard red winter and hard red spring ending stocks to even tighter levels.

 

Chicago Board of Trade soft red winter wheat futures ended just firm after spending much of the session in negative territory on disappointing weekly U.S. wheat export sales amid good global wheat export competition and early fund sales, brokers said.

 

U.S. wheat export sales for the week ended Oct. 20 totaled 379,400 metric tonnes, led by sales of hard red spring wheat and white wheat, according to the USDA. The sales were 4% below the previous week and 17% under the prior 4-week average.

 

CBOT December soft red winter wheat closed up 1 cent at US$3.24 1/2 after setting a 5-week low of US$3.22. CBOT March wheat ended up 1 cent at US$3.39 3/4.

 

Fimat USA bought 1,000 March, Iowa Grain sold 600 December late, Citigroup sold 800 December and Tenco Inc. sold 500 December US$3.40 calls, brokers said.

 

Spot U.S. soft red winter wheat cash basis bids were steady to firm Thursday, with a 9-cent gain in Cincinnati, Ohio; while spot midday CIF basis bids were firmed 1 cent, cash sources said.

 

In global wheat news, the European Union grain management committee granted export licenses for 435,000 metric tonnes of subsidized free-market wheat at a maximum refund of EUR7.49/tonne in its weekly tender Thursday. The move was less aggressive than last week, when 451,000 tonnes of wheat licenses were granted at EUR8.46/tonne.

 

The London-based International Grains Council on Thursday forecast 2005 global wheat production at 609.3 million metric tonnes, down from its September estimate of 609.4 million and well below last year's 623.2 million metric tonnes.

 

In other tender news, Jordan was also expected to tender for 100,000 tonnes of wheat Nov. 10.

 

 

Kansas City Board of Trade

 

KCBT December wheat ended Thursday up 5 1/2 cents at US$3.78 1/4, above its 20-day moving average of US$3.77 1/2 after setting a 1-1/2 week high of US$3.79; and March closed up 3 1/2 cents at US$3.81 1/4.

 

FC Stone bought 400 December, 200 March and 80 July; Fimat USA bought 100 December and sold 250 March, Goldenberg Hehmeyer bought 150 July and sold 150 December, Man Financial sold 200 March and UBS bought 400 December and sold 300 May, brokers said.

 

ADM Investor Services spread a net 100 December/March, Fimat USA sold 300 March/December, FC Stone bought 400 March/July, and Man Financial bought 300 July/May, brokers said.

 

Some traders noted the attractiveness of liquidating KCBT/Chicago December at 50 cents or better and KCBT/CBOT March wheat spreads at 40 cents or better, but some technical traders said the latter spread could still widen.

 

Cash spot U.S. HRW wheat basis bids were mixed, with 7-cent loss in Manhattan, Kan.; while spot midday CIF basis bids were steady, they noted.

 

Forecasts pointed to a chance for showers early next week and then for mostly dry weather across the U.S. Plains hard red winter wheat belt. The USDA reported Monday that the U.S. winter wheat crop was 57% good to excellent compared with 76% last year.

 

 

Minneapolis Grain Exchange

 

MGE December wheat settled Thursday up 3 cents at US$3.77, above its 10-day moving average of US$3.74 3/4; and March closed up 3 1/4 cents at US$3.83 3/4.

 

Cash spot U.S. HRS wheat basis bids were mixed Thursday, with a 15-cent gain in Minneapolis rail bids, they noted.