December 15, 2005

 

US Wheat Outlook on Thursday: Up 1 cent on weekly exports, weather, e-CBOT

 

 

U.S. wheat futures were called to open up 1 cent per bushel Thursday on strong weekly U.S. wheat export sales, U.S. hard red winter wheat concerns amid cold temperature forecasts and following firm overnight trade, brokers said.

 

The U.S. Department of Agriculture reported early Thursday U.S. wheat export sales for the week ended Dec. 8 totaled 712,700 metric tonnes.

 

The sales were 65% above the previous week and 70% over the prior 4-week average, with major increases for Egypt (111,500 metric tonnes), Taiwan (89,800 metric tonnes), the Philippines (81,200 metric tonnes) and Mexico (71,900 metric tonnes), the USDA said.

 

Fears of possible U.S. hard red winter wheat crop damage amid forecasts for cold temperatures next week were also seen as supportive, brokers said. New-crop KCBT wheat futures ended higher Wednesday on those fears.

 

In the overnight e-CBOT session, most-active March wheat at the Chicago Board of Trade closed up 1/2 cent at US$3.24 1/4 per bushel.

 

First resistance for CBOT March was seen at US$3.24 1/2 - Wednesday's high - and then at US$3.28. First support was put at US$3.20 and then at US$3.18 1/2 - Wednesday's low.

 

There were 97 deliveries posted against expired CBOT December wheat on Thursday, with the ADM Investor Services house account stopping all 97 lots.

 

Term Commodities posted 25 redeliveries Thursday against expired Kansas City Board of Trade December wheat, while the ADM House account stopped all lots. The oldest long date was Dec. 6.

 

There was one delivery posted against Minneapolis Grain Exchange December wheat, with all deliveries filled and no oldest long date.

 

In overnight U.S. wheat export news, Japan bought 80,000 tonnes of U.S. wheat for January-February shipment.

 

Continued weakness in the U.S. dollar against the yen Thursday was also bullish for U.S. wheat exports sales, brokers said.

 

In global news, Strategie Grains, a monthly analytical report published Thursday, said increased wheat output in the Southern Hemisphere will weigh on the world wheat market for the rest of 2005-06 but that prices could improve next year amid increased demand from India and China and smaller FSU-12 plantings.

 

The newsletter also forecast European Union 2006-07 grain production at 268.7 million metric tonnes, up 5% or 13.8 million tonnes on the year.

 

Meanwhile, the French Agricultural Ministry said French farmers planted winter cereals on 6.836 million hectares for the 2006-07 harvest, up 1.3% from last year and up 5.2% from the previous five-year average.