December 2, 2005

 

US Wheat Review on Thursday: Ends firm, minneapolis grain exchange leads on good health and retirement study Demand

 

 

U.S. wheat futures closed firm Thursday, led by gains in Minneapolis Grain Exchange spring wheat on light mill buying in March and May, and as a lack of deliveries so far in the December delivery cycle points to strong cash demand, brokers said.

 

Disappointing weekly U.S. wheat export sales of 250,700 metric tonnes, a marketing-year low, limited gains in Chicago Board of Trade soft red winter wheat and nearby Kansas City Board of Trade hard red winter wheat futures.

 

CBOT December wheat ended Thursday up 1 1/2 cents at US$3.05 1/2, and March settled up 1 1/4 cents at US$3.22, above the 20-day moving average of US$3.21 1/2.

 

"Volume was good today, with funds buying about 2,000 contracts," one CBOT wheat broker said.

 

Fimat Futures, Rand Financial, Man Financial and Cargill Inc. were noted buyers of March, brokers said.

 

Cash spot U.S. SRW wheat basis bids were steady to firm Thursday; spot midday Gulf SRW wheat basis bids firmed 2 cents, grain sources said.

 

There were 2,232 deliveries posted Thursday against CBOT December wheat as cash demand remained lackluster amid ample domestic supplies.

 

In global news, the European Union's grain management committee granted export licenses for 30,500 metric tonnes of subsidized free-market wheat at a maximum refund of EUR5.00/tonne in its weekly tender Thursday.

 

This compares with last week's 28,500 tonnes of wheat licenses granted at EUR5.00/tonne.

 

Australia's wheat crop has not been unduly affected by unusually late rains in the year, which have halted and delayed harvesting in many areas of eastern Australia, industry participants said Thursday.

 

The government's chief commodities forecaster, the Australian Bureau of Agricultural & Resource Economics, on Tuesday revised up a forecast for wheat output to 24.1 million metric tonnes.

 

 

Kansas City Board of Trade

 

KCBT December wheat settled up 1 3/4 cents at US$3.70 3/4, and March wheat ended up 3 1/2 cents at US$3.74.

 

Deferred KCBT wheat contracts were supported by drought in the southern hard red winter wheat belt, particularly in Oklahoma and Texas, brokers said.

 

There were 370 redeliveries posted Thursday against KCBT December wheat.

 

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

 

The KCBT/CBOT March spread settled Thursday at 52 cents, premium KCBT, a new high. The spread closed Wednesday at 49 3/4 cents.

 

"Near-term targets for the KCBT March/CBOT March 2006 spread are 57 cents and 67 1/2 cents, both retracement levels from the recent Nov. 10-30 correction," one CBOT technical trader said late Wednesday.

 

For the KCBT/CBOT December spread, near-term targets were 67 cents and 78 cents, he added.

 

 

Minneapolis Grain Exchange

 

MGE December wheat ended up 4 1/2 cents at US$3.76 1/2, and MGE March closed up 3 1/2 cents at US$3.80 per bushel, above the 50-day moving average of US$3.78 1/2.

 

No deliveries were posted Thursday against MGE December wheat.

 

MGE gains Thursday came despite good commercial sales, brokers said, adding that Country Hedging was a noted seller of March.

 

Cash U.S. spring wheat bids were mixed, while the basis had no comparison as it was rolled from the December to the March futures, cash sources said.

 

Minneapolis wheat rail receipts Thursday totaled 294 cars versus 188 cars last year.