December 22, 2007

 

US Wheat Review on Friday: Mixed; corrects old/new crop spreads

 

 

U.S. wheat futures ended mixed, with nearby contracts succumbing to follow-through selling, while bullish longer-term fundamentals supported deferred month contracts.

 

March CBOT wheat ended 5 cents lower at US$9.49 a bushel, March KCBT wheat settled 7 3/4 cents lower at US$9.68 3/4, and March MGE wheat finished 7 cents lower at US$10.78.

 

The lack of fresh supportive news, with export demand ebbing this week, world production estimates holding steady and generally favorable near term weather for winter wheat crops applied pressure to nearby futures, analysts said.

 

The unwinding of some bull spreads were featured, with new crop futures benefiting from the spreading and the need to raise new crop prices to levels that will battle corn and soybeans crops for acreage in 2008 underpinned the back months, a CBOT floor trader said.

 

Otherwise futures had little fresh news to derive direction, with end of the week position evening ahead of next week's holiday helping promote the mixed tonnee, analysts added.

 

The DTN Meteorlogix Weather forecast said Friday forecast maps through New Year's Eve indicate several weather systems developing in the Colorado Plateau and southwest U.S. Plains region, then moving eastward across the southern Plains and lifting toward the east-northeast across the Mississippi Valley and the Northeast. This is an active weather pattern. It means chances for significant precipitation through the central and southern Plains, Delta and Midwest during at least next week, and possibly longer, Meteorlogix said. This pattern may be cool to cold through the central U.S. at times, but there is no severe cold in this pattern for any winter wheat areas, Meteorlogix added.

 

In CBOT pit trades, buyers and sellers were scattered among various commission houses, with speculative funds estimated sellers of 2,000 lots.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures ended mixed in quiet holiday trade, analysts said. The market had done enough correcting in flat price action and was focused on correcting bull spreads, a KCBT floor broker said. Choppy activity was featured with the trade looking ahead to the New Year when the battle for acreage will heat up and index funds return to rebalance their market positions, he added.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE wheat futures ended mixed as well. Light volume was featured, with wide intervals between bids and offers ranging form 5 cents to 10 cents, a MGE floor broker said. The trade was thin, with many traders calling quits early ahead of the holidays, as the absence of anything new in the world of wheat minimized trading, he added.