December 21, 2007

 

US Wheat Review on Thursday: Lower; lacks fresh support, exports

 

 

U.S. wheat futures ended lower Thursday, setting back from Wednesday's advances on a lack of fresh supportive news and bearishly construed weekly export sales data, analysts said.

 

March CBOT wheat ended 19 1/2 cents lower at US$9.54, March KCBT wheat settled 18 3/4 cents lower at US$9.76 1/4, and March MGE wheat finished 10 1/2 cents lower at US$10.85.

 

The lower-than-expected export sales figure coupled with the cancellation of prior export sales were a reminder that high prices will deter demand, analysts added.

 

Technically inspired activity was featured, with traders saying the export data were anticipated with the lack of any fresh supportive news allowing overbought conditions to trigger profit-taking pressure.

 

Meanwhile, precipitation in the winter wheat belt and the market's inability to sustain any significant buying added weakness to keep prices pinned in negative territory, a CBOT floor broker said.

 

Nevertheless, bullish market sentiment continues to provide underlying support. That strength is not allowing the market to "drop hard," with the negative psychology from the export sales report producing no more than mild profit- taking opportunities, he added.

 

U.S. weekly wheat export sales totaled 221,500 metric tonnes for the week ended Dec. 13, 60% below the previous week and 50% lower than the prior four-week average, the USDA reported. Included in the total were sales of 17,200 tonnes for delivery in the 2008-09 marketing year. USDA reported sales cancellations of 104,100 metric tonnes for unknown destinations.

 

The DTN Meteorlogix Weather forecast said Thursday's longer-range weather models through next week show an active weather pattern, with storm systems migrating from western Canada or the northwestern U.S. southward over the Rockies or Plains before moving eastward. This means there is an increased risk/chance for precipitation in the southern Plains wheat and livestock areas during the time frame after Christmas Day, Meteorlogix said. There is a chance for moderate precipitation through southern and eastern areas of the Plains Tuesday into Wednesday.

 

In CBOT pit trades, buyers and sellers were scattered among various commission houses, with speculative fund selling estimated at 3,000 lots.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended lower with other U.S. wheat markets, succumbing to technical sales, export sales disappointment and moisture opportunities for the Plains during the weekend, analysts said.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended lower, keeping pace with declines in other futures markets, with technical pressure and light end-of-year positioning featured, analysts said.