November 4, 2006

 

US Wheat Review on Friday: Mostly lower close on profit-taking

 

 

U.S. wheat futures ended mostly lower Friday with little fresh fundamental news to direct prices and on pre-weekend price-taking, sources said.

 

December Chicago Board of Trade wheat closed 1 cent higher at US$4.92 1/2 per bushel, December Kansas City Board of Trade settled 1 1/2 cents lower at US$5.22 1/2, and December Minneapolis Grain Exchange wheat ended down 1/2 cent at US$5.03.

 

Dan Zwicker, senior analyst at AgriVisor Services, said wheat was exhausted after running up sharp advances Thursday and then trimming gains before the close.

 

"I think yesterday kind of climaxed things for a while," Zwicker said. "Basically, what the market is doing now is just taking a breather."

 

December CBOT wheat held weaker during most of the day session but bounced to a slightly firmer position just before the close.

 

Prices settled lower than last week's close, when December CBOT wheat ended at US$5.08 1/2, noted Chad Henderson, analyst with Prime Agricultural Consultants.

 

"I don't think there's enough new news," he said.

 

A CBOT floor source added wheat futures will likely be consolidating until the U.S. Department of Agriculture supply and demand report is released next week. Wheat prices were largely directionless during the day session and did not feel much leadership from corn or soybeans, he said.

 

Henderson said fresh demand was needed to sustain a new rally. He agreed wheat did not follow corn or soybeans Friday.

 

"I think wheat was wheat," Henderson said. "I think it's sitting here right now, hovering around the US$5 level and thinking we need new export business to go up from here."

 

USDA Secretary Mike Johanns told Dow Jones Newswires he will lead a delegation to India this month seeking a better agricultural trading relationship with the country.

 

India has bought an extraordinary amount of wheat this year but none from U.S. exporters. U.S. wheat producers want that to change.

 

The USDA and U.S. industry officials blame strict Indian import requirements for the situation. The requirements set a nearly zero level tolerance for weed seeds in shipments.

 

 

Kansas City Board of Trade

 

KCBT saw light trade during the day session, a floor source said. Wheat prices did not follow corn Friday as they did on Thursday, he said.

 

"It was dead all day today," the source said. "Today was kind of a day where people take profits."

 

There was a bounce near the close from light commission house buying, he said.

 

 

Minneapolis Grain Exchange

 

Trading was quiet on profit-taking before the weekend, a MGE floor source said. He called activity during the day session "uninspired trade."

 

"Nobody was too interested in wheat," the source said. "We spent most of the day just kind of watching the board."

 

There was some roll in the December/March spread, the source said.