December 24, 2005

 

US Wheat Review on Friday: Bolts higher on tech buys

 

 

U.S. wheat futures ended firm Friday, rallying on technically motivated speculative buying amid the market's ability to pierce through overhead resistance levels, traders said.

 

CBOT March wheat futures ended 3 1/4 cents higher at US$3.34 1/2, March Kansas City wheat settled 4 1/4 cents higher at US$3.80 1/4 and Minneapolis March wheat ended 3 1/2 cents per bushel higher at US$3.83 1/2.

 

Speculative fund short covering supported prices in CBOT futures while technical buying lifted KCBT and MGE wheat futures. "It was another technical rally, with the ability of March futures at each exchange to pop through overhead resistance levels uncovering pre-placed buy stop orders," said CBOT commission house broker.

 

The absence of fresh fundamental news continued to keep technical factors in play, with speculative funds remaining a directive force on prices.

 

Meanwhile, there is general fear in the market of being short ahead of the first of the year when traders anticipate a reallocation of speculative index fund positions will attract a wave of buying in the market, analysts added.

 

CBOT March wheat climbed to a two-month high before resistance at its 200-day moving average tempered upward momentum.

 

In other news, Australian wheat exporter AWB Ltd. (AWB.AU) expects to remain a long-term wheat supplier to Iraq and will bid for the next tender, despite losing out to the U.S. for some tenders recently, a company spokesman said.

 

In CBOT pit trades, Calyon Financial and Fimat each bought 700 March, O'Connor bought 1,000 March, Refco bought 400 March and Prudential Financial bought 500 March. Commodity fund buying was estimated at 6,500 contracts.

 

 

KANSAS CITY BOARD OF TRADE

 

KCBT wheat rallied to a two-month high, propelling on technically motivated buys, with advances accelerating once triple top resistance at US$3.77 basis the March contract was breached.

 

In pit trades, Benson Quinn bought 300 March, RIS Div of Man Financial bought 250 March, Fimat bought 500 March, Man Financial bought 900 March, and Refco bought 1,000 March and 200 July.

 

 

MINNEAPOLIS GRAIN EXCHANGE

 

Spring wheat futures on MGE experienced a technical bounce, climbing to two-month highs. Technically motivated buying was a featured attraction in relatively quiet pre-holiday trade. The active March futures' ability to rally through a series of overhead resistance levels and eventually fill a chart gap left from Oct. 17 up to US$3.88 1/2 fueled the charge, traders said.