December 16, 2005

 

US Wheat Review on Thursday: Mixed; kansas city climbs on exports, cold outlooks

 

 

U.S. wheat futures ended mixed Thursday, with KCBT disengaging from Chicago and Minneapolis on solid hard red wheat weekly export sales and on fears of winterkill damage next week amid cold outlooks.

 

CBOT March wheat futures ended down 5 cents at US$3.18 3/4, March Kansas City wheat settled 1/2 cent higher at US$3.66 1/2 and Minneapolis March wheat ended 1 cent per bushel lower at US$3.73 1/2.

 

Extended forecasts for artic temperatures in the southern plains next week and good weekly export sales favoring hard wheat aided KCBT and MGEX wheat, with the spread between those markets and Chicago widening, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

However, KCBT and MGEX futures managed to pare some their gains down the stretch as weather models Thursday removed subzero Fahrenheit temperatures from the forecast for the southern Plains and Texas Panhandle and snow is expected ahead of the cold, a protective factor for the crop.

 

Meanwhile, CBOT wheat was the weak link in the wheat complex, as fundamental weakness for soft wheat and recent technical short covering had ran its course, leading to a retracement of recent gains. CBOT wheat had the greatest gains in previous sessions but continues to have the weakest fundamentals, setting the stage for the pullback, added McCambridge.

 

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 four-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.

 

DTN Meteorlogix Weather Service said more Pacific-origin air flow now appears in the weather outlook. This inflow of Pacific air will moderate the cold wave from southern Canada, resulting in considerably diminished bitter-cold conditions for the Plains wheat areas. However, the precipitation outlook for the southern Plains remains dry. This feature continues to stress the winter wheat crop, Meteorlogix added.

 

In CBOT pit trades, Citigroup and Refco each bought 600 March, Iowa Grain bought 1,000 March, and Man Financial bought 400 March. Calyon Financial, RIS division of Man Financial and Rand Financial each sold 500 March, Citigroup sold 1,500 March, Fimat sold 800 March and Prudential Financial sold 400 March.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat was the strongest link in the wheat complex. The March future climbed to a 1 1/2-week high on exports and weather, before moderating weather forecasts took some of the edge off the market.

 

In KCBT trades, ADM Investor Services bought 800 March and 200 July, Man Financial bought 400 March, 300 March and 200 July. ADM Investor Services sold 400 March and 200 July, RIS division of Man Financial sold 300 March, Fimat sold 300 March and Man Financial sold 700 March.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGX wheat futures ended modestly lower, retracing earlier gains on spillover pressure from a late slide in Chicago wheat, traders said. The nearby March futures rallied to a 1 1/2-week high in early trade, supported by commercial export buying, but lost its momentum after the first hour of trading, finally succumbing to late Chicago weakness.