November 14, 2005

 

US Wheat Outlook on Monday: Flat to up 1 cent on technicals, export hopes

 

 

U.S. wheat futures were called to open flat to up 1 cent Monday on follow-through technical buying, hopes for increased U.S. wheat export sales and concerns about the U.S. winter wheat crop's condition, brokers said.

 

In the overnight e-CBOT session, most-active December wheat at the Chicago Board of Trade closed up 1 1/4 cents at US$3.12 3/4 and March ended up 3/4 cent at US$3.29 after closing higher Friday and near the session's mid-range.

 

"The bears are still in firm near-term technical control," said Jim Wyckoff, a technical analyst. "It will take a close back above US$3.40 (in CBOT March wheat) to provide the bulls with a bit of fresh upside momentum."

 

First resistance for CBOT March wheat was seen at US$3.30 and then at US$3.35. First support was put at US$3.26 - Friday's low - and then at US$3.24 1/2 - last week's low.

 

Hopes for increased export sales to Iraq were boosted Saturday by a quote in The Australian newspaper from Iraqi Deputy Prime Minister Ahmad Chalabi that the Iraqi Grains Board has decided to suspend imports of Australian wheat.

 

Australian Foreign Minister Alexander Down on Sunday said Chalabi denied "emphatically that he said Iraq had suspended future orders of Australian wheat."

 

Iraq has become the No. 2 U.S. wheat customer this year, while its former top supplier, Australia, has recently become embroiled in controversy about whether payments to a company trucking wheat around Iraq from 1999 actually went to the Saddam Hussien regime.

 

In other export news, Jordan said it would tender Thursday for 100,000 metric tonnes of optional-origin wheat, a tender that was postponed due to the recent bombings in Amman.

 

Cash U.S. hard red winter wheat basis bids were steady to firm Monday, with a 4-cent gain in Hutchinson, Kan.; soft red winter wheat basis bids were steady to weak, with a 5-cent loss in the spot Kansas City SRW truck bid; and spring wheat basis bids were steady to mixed Monday, with a 5-cent gain in the spot Minneapolis rail bid and a 3-cent loss in Portland, Ore., grain merchandisers said.

 

Above to much-above normal temperatures and below-normal has stressed the developing wheat crop across Oklahoma and Texas, while forecasts called for only possible light showers Monday and dry conditions through Friday across the U.S. Southern Plains hard red winter wheat belt, Meteorlogix weather service said Monday.

 

The U.S. Department of Agriculture will release its weekly crop condition report late Monday. Last week the government said the U.S. winter wheat crop was 57% in good to excellent condition, down from the previous week's 61% in that shape.

 

The CFTC will release its weekly commitment of traders report late Monday due to Friday's Veterans holiday.