November 2, 2005

 

US Wheat Review on Tuesday: Ends mixed, led by kansas city board of trade, minneapolis grain exchange liquidation

 

 

U.S. wheat futures settled mixed Tuesday, with continued speculative liquidation and the lack of confirmation of last week's rumored U.S. wheat sales to Iraq weighing on Kansas City and Minneapolis higher-protein wheat markets, brokers said.

 

Gains in Chicago Board of Trade soybean futures, on technically oversold and seasonal signals, underpinned CBOT soft red winter wheat futures, they added.

 

CBOT December wheat settled Tuesday steady at US$3.17 after setting a new contract low of US$3.14 1/2. CBOT March wheat also ended steady at US$3.32 3/4.

 

Fimat and Goldenberg Hehmeyer each bought about 400 December, while ADM Investor Services sold 300 December, brokers said. Prudential Financial spread 1,000 December/March and UBS spread 700 December/March.

 

Cash spot U.S. SRW wheat basis bids were steady to firm; while spot midday Gulf SRW basis bids firmed 9 cents, they noted.

 

 

Kansas City Board of Trade

 

KCBT December wheat ended down 2 1/2 cents at US$3.68 3/4; and March closed down 2 cents at US$3.73.

 

Continued fund liquidation has pared the net fund long stance to about 38,000 to 40,000 contracts, with about 60% of this position in the nearby December, brokers said.

 

"We believe the majority of this position will be rolled into March," one broker said. "With recent strength in the cash basis (both domestic and export), we don't expect the spread to widen beyond 6 cents."

 

Cargill Investor Services sold 600 December and 200 March, ADM Investor Services sold 200 December and 200 July and bought 100 March, Man Financial sold 500 December and 100 March and bought 100 September, Refco Inc. bought 100 December and 250 March and sold 50 July, and Shay Trading sold 600 March and 100 September and bought 100 May and 100 July, brokers said.

 

In spread trade, Fimat sold 200 December/March while Refco sold 200 March/July, brokers added.

 

Cash spot U.S. HRW wheat basis bids were steady, while spot midday CIF basis bids were unchanged, they noted.

 

Forecasts called for mostly dry conditions through the weekend across the U.S. Plains following recent rains.

 

The U.S. Department of Agriculture reported Monday that the U.S. winter wheat crop was 61% in good to excellent shape, up from last week's 57% in that condition.

 

 

Minneapolis Grain Exchange

 

MGE December wheat settled down 4 cents at US$3.68 1/2; and March closed down 3 1/4 cents at US$3.74 1/4.

 

Local and speculative sales were offset by some commercial buying, on ideas of imminent export business, brokers said.

 

Japan said it would tender for 100,000 metric tonnes of wheat, including 60,000 tonnes of U.S. wheat, they noted.

 

Cash spot U.S. HRS wheat basis bids were steady to firm Tuesday, while total deliverable stocks at Duluth/Superior rose to 14.174 million bushels from last week's 13.485 million, a bearish influence, brokers said.