November 26, 2005

 

US Wheat Review on Friday: Mixed; minneapolis grain exchange  up on commercials, exports

 

 

U.S. wheat futures closed mixed on Friday, with Minneapolis Grain Exchange spring wheat up on light commercial buying and good weekly U.S. HRS export sales, brokers said.

 

Chicago Board of Trade soft red winter wheat futures ended lower on light fund sales, new contract lows in corn, weak CBOT soy trade, and ample global lower-protein wheat supplies.

 

Meanwhile, Kansas City Board of Trade hard red winter wheat future were hit by follow-through sales after Wednesday's two-month low and forecasts for rains in Kansas.

 

"Trade was awfully light today, with not much to talk about," one CBOT broker said, adding that early sales in KCBT wheat turned CBOT wheat lower.

 

CBOT December wheat ended Friday steady at US$2.97 per bushel, while CBOT March settled down 1/2 cent at US$3.12 1/4 after matching Tuesday's contract low of US$3.11.

 

Good buying interest of about 1,500 contracts was seen at the US$3.11 level, one broker noted.

 

Fimat Futures sold 500 March, while Goldenberg Hehmeyer, Refco Inc., UBS and Tenco Inc. each bought 100 March late.

 

Rand Financial spread 1,000 December March before next Wednesday's first notice day for deliveries against the CBOT December contract.

 

Cash spot U.S. SRW wheat basis bids were steady to weak Friday; spot midday Gulf SRW wheat basis bids steady, grain merchandisers said.

 

The U.S. Department of Agriculture reported early Friday that weekly U.S. wheat exports sales totaled 454,600 metric tonnes for the 2005-06 marketing year, matching CBOT traders' expectations.

 

Still, the sales were 19% below the previous week and 34% under the prior four-week average. Prominent buyers included Japan (73,300 tonnes), Nigeria (64,100 tonnes, including 35,500 tonnes switched from unknown destinations), Pakistan (50,000 tonnes) and Venezuela (42,500 tonnes).

 

Overnight U.S. wheat export sales were quiet, while traders noted that Chinese wheat imports at 159,818 metric tonnes were down 84% from last year.

 

Good Chinese buying last year of U.S. soft red winter wheat helped to underpin U.S. prices.

 

In global news, the International Grains Council forecast Thursday the 2005-06 world wheat crop at 610.7 million tonnes, up 1.4 million from last month's forecast, but still down from the 2004-05 crop of 623.2 million tonnes.

 

In other global export news, Philippine feed millers bought 44,000 metric tonnes of wheat from China at US$143.50 a metric tonne, on a cost-and-freight basis, for arrival in February, sources said.

 

 

Kansas City Board of Trade

 

KCBT December ended Friday up 1/4 cent at US$3.47 3/4; and March wheat closed up 1/4 cent at US$3.52 3/4.

 

Commodity funds continued to liquidate their net long stance, selling about 2,000 futures during the session, brokers said.

 

ADM Investor Services sold 900 March, FC Stonnee bought 400 March, Fimat sold 400 March and Man Financial sold 300 March and 200 May, brokers said.

 

In spread trade ahead of the Nov. 30 first notice day for deliveries against December, Fimat Futures and AD Investor Services each spread 200 December/March, ADM Investor Services spread 900 March/December and FC Stonnee spread 250 May/July, they noted.

 

The KCBT/CBOT March wheat spread ended at 40 1/2 cents, premium KCBT, after ending Wednesday at 39 3/4 cents, premium KCBT. The spread hit a high Nov. 10 of 49 3/4 cents as global demand for higher-protein U.S. wheat outpaces that for U.S. SRW wheat.

 

Friday was last trading day for KCBT December wheat options.

 

Cash spot U.S. HRW cash basis bids were steady to weak; spot midday U.S. Gulf HRW basis bids were steady, cash sources said.

 

The USDA reported Monday that the U.S. winter wheat crop was 55% in good to excellent condition, down 1 percentage point from the previous week.

 

The government will release late Monday its last weekly crop condition rating for the autumn.

 

 

Minneapolis Grain Exchange

 

MGE December ended Friday up 2 cents at US$3.64; and MGE March closed up 3/4 cent at US$3.65 1/2.

 

ADM Investor Services bought 200 March and spread 1,000 March/December, UBS bought a net 100 March and Fimat Futures spread 350 December/March, brokers said.

 

Cash U.S. spring wheat basis bids were steady to weak, while total known weekly U.S. HHS wheat export sales totaled 198,100 metric tonnes.