November 23, 2005

 

US Wheat Outlook on Wednesday: Up 1-2 cents on e-CBOT, pre-holiday evening

  

 

U.S. wheat futures were called to open up 1-2 cents per bushel Wednesday following firm overnight trade and in a seasonal pre-Thanksgiving Day bounce, brokers said.

 

Trade could be two-sided in Kansas City Board of Trade ahead of Friday's last day for trading KCBT December wheat options. Traders noted late Tuesday that open interest in the KCBT December wheat futures contract remained above 15,000 lots.

 

The U.S. wheat futures markets close at noon CST Wednesday, will be closed on Thursday in observance of the Thanksgiving holiday, and will close at noon CST on Friday.

 

In the overnight e-CBOT session, March wheat at the Chicago Board of Trade closed up 2 1/4 cents at US$3.15 after setting a contract low Wednesday of US$3.11 per bushel.

 

First resistance for CBOT March wheat was seen at US$3.16 - Tuesday's high - and then at US$3.20. First support was put at US$3.11 - Tuesday's contract low- and then at US$3.08.

 

Cash U.S. hard red winter wheat basis bids were steady to narrowly mixed Wednesday, with a 3-cent loss in Portland, Ore.; soft red winter wheat basis bids were mostly steady to firm, with a 1-cent gain in St. Louis; and spring wheat basis bids were steady to weak, with a 10-cent loss in Minneapolis rail bids, grain merchandisers said.

 

Wheat traders eyed forecasts for possible light precipitation across parts of the dry U.S. Southern Plains hard red winter wheat belt early next week, an element that could limit gains in KCBT deferred contracts.

 

Meanwhile, very cold U.S. Midwest temperatures late this week were not thought to be cool enough to damage the dormant soft red winter wheat crop, forecasters said.

 

Overnight U.S. wheat export news was quiet.

 

In global wheat news, Australia's AWB Ltd. (AWB.AU) doesn't expect its overseas operations will be affected by any findings of a government inquiry into payments of kickbacks through its wheat exports to Iraq under the U.N.'s oil-for-food program, AWB Managing Director Andrew Lindberg said Wednesday.

 

AWB operates a monopoly over wheat exports from Australia and other rural services and financial services businesses within Australia.

 

An Oct. 27 report on the U.N. oil-for-food program by Paul A. Volcker found AWB paid US$221.7 million to a Jordanian trucking company for transporting wheat through Iraq, but the funds were channeled to the regime of Saddam Hussein.