December 2, 2006

 

US Wheat Review on Friday: Settles lower on absence of fresh news

 

 

U.S. wheat futures closed weaker Friday as light speculative selling and end-of-the-week profit-taking pressured prices during a subdued trading session, sources said.

 

There also was a lack of fresh fundamental news to support prices, traders said.

 

Chicago Board of Trade March wheat settled 3/4 cent lower at US$5.20 3/4 per bushel, Kansas City Board of Trade March wheat ended down 4 3/4 cents at US$5.45 1/2, and Minneapolis March wheat closed 1 1/2 cents weaker at US$5.28 1/2.

 

CBOT March wheat saw some technical support during the day session after closing Thursday at the highest level since Nov. 8, sources said. Overall, however, there was an absence of follow-through buyers, sources said.

 

That allowed profit-taking and light selling to push prices to the downside, a broker said.

 

Some market participants sat on the sidelines Friday after Thursday's volatility, the broker said. There also was little news out to direct prices, he added.

 

The broker described the session as "the quietest day in two weeks."

 

In CBOT pit trades, Man Financial and JP Morgan each bought 400 March. Fimat sold 500 March. ADM spread 400 July/March. Funds bought an estimated 1,000 contracts.

 

"There's not too much to read into," the broker said.

 

Bill Nelson, assistant vice president with A.G. Edwards & Sons in St. Louis, said the beginning of December is typically slow for news as crops are going into dormancy.

 

"It's really kind of going into a season in the year where typically there's an absence of news," he said.

 

Some pressure was seen from weakness in the neighboring corn and soybean markets, according to Nelson. Wheat was "looking over there for a little bit of direction," he said.

 

Looking at the weather, the dry U.S. southern Plains received some moisture from stormy weather sweeping over the central and eastern Midwest, the DTN Meteorlogix weather firm reported. The most extensive precipitation in the area fell in Oklahoma, southeastern Kansas, and north-central Texas, with moisture totaling up to 3/4 inch, the firm said.

 

Concerns about dry soil remain, however, as wheat growing regions still need more moisture, sources said. Meteorlogix forecasts the wheat areas will have normal to below-normal precipitation next week.

 

In other news, the Commodity Futures Trading Commission on Friday afternoon is scheduled to release the Commitments of Traders Report for the period ending Nov. 28.

 

 

Kansas City Board of Trade

 

The day session was slow at KCBT, a floor trader said. Funds and buyers in general were absent, she said.

 

"I don't think there were a lot of buyers in there, especially in mid to late day," the source said.

 

Roy Huckabay, analyst with the Linn Group, noted there was inter-market spread trade buying CBOT and MGE and selling KCBT.

 

"Kansas City was the weak sister today," Huckabay said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures followed CBOT during the day session, a floor source said. Volume was relatively light, he said.

 

The source also noted the inter-market trade buying MGE and selling KCBT.

 

"Inter-market trading has been the focus here recently," he said.

 

In other news, the ongoing saga of the Canadian government's attempts to end the Canadian Wheat Board's monopoly on wheat marketing in western Canada took another turn when the CWB said its chief executive would be removed from his position.

 

CEO Adrian Measner received a letter from Canadian Agriculture Minister Chuck Strahl, which effectively starts the process of removing him from his position, according to the CWB.