December 23, 2005

 

US Wheat Review on Thursday: Climbs on tech buys in thin trade

 

 

U.S. wheat futures ended firm Thursday, pressing into overhead resistance on technically inspired buying in holiday-type trading, analysts said.

 

CBOT March wheat futures ended 3 1/4 cents higher at US$3.30 3/4, March Kansas City wheat settled 4 1/2 cents higher at US$3.76 and Minneapolis March wheat ended 3 cents per bushel higher at US$3.80.

 

Technically driven gains fueled the day's advances, with a general buy attitude in U.S. grain and oilseed markets Thursday and continued concerns over dryness in the southern plains helping support prices, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago.

 

Chicago wheat was the leader of the complex for most of the day, as the ability of the market to pierce through overhead resistance and the reluctance of participants to press the short side of the market - amid ideas that speculative investment money will fuel upside price strength in January - kept sellers at bay.

 

The market's upward momentum continues to generate buying sentiment, as each breached resistance level clears out buy-stop orders, clearing the way for the market to look for next level of resistance, added McCambridge.

 

Meanwhile, decent weekly export sales added strength, while speculative buying easily supported prices in the face of overbought conditions in thin holiday trade. The U.S. Department of Agriculture said wheat export sales were 522,700 metric tonnes, 27% below the previous week, but 14% over the prior four-week average. Trade estimates ranged from 400,000 to 600,000 tonnes.

 

In CBOT pit trades, Fimat bought 500 March, Man Financial bought 200 March and Prudential Financial bought 400 March. Citigroup sold 500 March, Fimat sold 600 March, Refco sold 300 September and Prudential Financial sold 200 March.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat futures climbed to a one-month high, buoyed by strength in Chicago, as the market played catch-up, realigning spreads as the market lagged behind Chicago on Wednesday, said McCambridge. Meanwhile, drought concerns for Texas and Oklahoma wheat and underlying demand remained supportive factors.

 

In pit trades, ADM Investor Services bought 200 March and 300 July, Frontier bought 300 March, RIS Div of Man Financial bought 500 March, Fimat bought 300 March, Man Financial bought 300 March and Prudential Financial bought 400 March. ADM Investor Services sold 700 March, FCStonnee and Frontier each sold 200 March.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

MGE spring wheat futures ended higher across the board, following strength in Chicago wheat, with a late technical boost helping prices finish at session highs. UBS Securities and ADM Investor Services were featured buyers.