December 13, 2006

 

US Wheat Review on Tuesday: Lower on speculative sales; lacks fresh support

 

 

U.S. wheat futures stumbled lower Tuesday, backpedaling on speculative sales as futures lack supportive fundamentals to promote upside movement, analysts said.

 

March CBOT wheat ended 8 cents lower at US$4.82; March KCBT wheat settled 5 3/4 cents lower at US$5.05 1/4; and March MGE wheat finished 3 1/4 cents lower at US$4.99.

 

"Its hard to support higher prices without fresh export demand, and in the absence of fundamental issues, the market is taking the path of least resistance and that is lower," said Shawn McCambridge, senior gains analyst with Prudential Financial in Chicago.

 

Futures initially attempted to push higher on oversold ideas, but without spillover momentum from corn and lingering concerns over demand, participants took it as a signal of market weakness, McCambridge added.

 

The theme was consistent across all U.S. wheat futures, with the classes weighing on each other, a CBOT floor analyst said.

 

Light fund selling and small technical sell stops pressured soft red wheat futures at the CBOT, and when corn was unable to maintain its gains, wheat weakened as well, a trader said.

 

Overall, trading was thin despite a sloppy close in Chicago, wheat sources said.

 

In CBOT pit trades, funds sold an estimated 2,500 contracts. Buyers were lightly scattered, while Calyon Financial sold 1,500 March and Man Financial sold 400 March.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat ended lower, with light technically-related speculative selling pressing the market, a KCBT source said. Volume was thin - less than 6,000 contracts, traders said. Intra market spreads were dull, with fund selling estimated at 500 contracts. Man Financial was a featured player, buying 300 March and selling 300 March and 300 July.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE spring wheat futures settled lower, following the lead of other U.S. wheat futures, a floor analyst said. Trading was thin with traders attempting to buy MGE May versus KCBT May amid shifting of hard red wheat usage in Monday's crop report, a MGE broker said.