December 21, 2007

US Wheat Outlook on Friday: Down 2-4 cents on follow though selling

U.S. wheat futures are predicted to begin trading 2-to-4 cents lower Friday, undermined by follow through weakness from Thursday in what is expected to be a quiet session, an analyst said. In overnight electronic trading, CBOT March wheat declined 2 3/4 cents to US$9.51 1/4 per bushel and KCBT March hard red wheat fell 3 3/4 cents to US$9.72 1/2 per bushel.

Wheat should trade weaker following the losses established Thursday and the continued weakness in overnight trade, the analyst said. India said it had no plans to issue any new tenders for wheat and there isn't any fresh news out to trade on, the analyst said.

It was a low volume trade Thursday with the market seeing more of the same ahead of the holiday, a trader said. The lack of volume however, could contribute to a choppy session and there could be wide price ranges, the trader said.

On daily open auction technical charts, CBOT March wheat closed nearer the session low Thursday, following a bearish "exhaustion tail" established this week on the daily bar chart, a technical analyst said. Despite this, bills still have the near-term technical advantage, the analyst said. The next upside price objective remains pushing prices past resistance at the contract high of US$10.09 1/2 per bushel. The next downside price objective for bears is closing prices below this week's low of US$9.47 per bushel.

First resistance is seen at US$9.70, and then at US$9.79. First support is seen at US$9.50, Thursday's low and then at US$9.47.

March KCBT wheat also closed nearer the session low Thursday. Price action this week has also produced an "exhaustion tail," on the daily bar chart in the nearby hard red winter wheat, though bulls still have the near-term technical advantage at present. The next upside price objective in March remains pushing and closing prices above resistance at US$10.19 per bushel, the contract high. The bears' next downside objective is closing prices below support at this week's low of US$9.66.

First resistance is seen at US$9.93 1/2 and than at US$10.00. First support is seen at Thursday's low of US$9.69 1/2 and then at this week's low of US$9.66.