December 19, 2007

 

US Wheat Review on Tuesday: Mostly down; corrective pullback continues

 

 

U.S. wheat futures ended mostly lower Tuesday, continuing their corrective pullback from all-time highs, analysts said.

 

March CBOT wheat ended 14 cents lower at US$9.52, March KCBT wheat settled 14 cents lower at US$9.71 1/2, and March MGE wheat finished 9 1/4 cents higher at US$10.68 3/4.

 

The defensive theme was consistent, with the absence of fresh bullish news and the absence of a weather factor for winter wheat crops opening the door for corrective sales to resurface, traders said.

 

The market upside push was seemingly exhausted on the last leg up, with traders looking to book some profits after all major wheat futures markets propelled to new milestonnees Monday, a CBOT floor analyst said.

 

Technical selling and old/new crop spreading was featured as the market corrects from recent price movements, he added.

 

Meanwhile, the nearby Minneapolis wheat futures defied the lower tonnee, rallying on supply and demand characteristics, amid a shortage available spring wheat and good underlying demand, analysts said.

 

The DTN Meteorlogix Weather forecast said the southern Plains was mostly dry Monday, and are expected to be dry through Thursday, but Friday and Saturday could see up to half an inch of mixed rain, ice and/or snow. Most of that precipitation will fall in the eastern areas, according to DTN Meteorlogix. The western end of the Plains isn't likely to see more than a quarter inch. That pattern, of more precipitation in the east than in the west, is expected to continue for the next six to 10 days, Meteorlogix said.

 

In CBOT pit trades, buyers and sellers were lightly scattered among various commission houses.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended lower, quietly succumbing to another day of corrective profit-taking, analysts said. The market is seemingly establishing a range, as traders anticipate the market has set its near term high, analysts added. Overall activity was slow, with the exhaustion of upside movement more of an influence of the declines than any fundamental influence, a KCBT broker said.

 

In pit trades, volume was estimated between 4,000 to 5,000 lots, with electronic volume pegged near 3,500 lots, a KCBT floor trader said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended mostly lower. The nearby March contract escaped the defensive clutches of speculative profit-taking, finding support from supply and demand issues, a MGE floor broker said. Spring wheat supplies are very tight, and with good underlying demand, old crop futures found strength while deferred new crop futures fell under pressure, he added.

 

Old/new crop spreading was featured in otherwise quiet action, traders said.