December 24, 2009

US Wheat Outlook on Thursday: Down 3-5 cents; overnight losses, poor exports

U.S. wheat futures are expected to open weaker following overnight losses as technical selling and poor demand keeps the market under pressure, traders said.

Chicago Board of Trade wheat is called 3 to 5 cents lower. In overnight trade, March CBOT wheat was down 4 3/4 cents to US$5.24 1/4 per bushel and July wheat was down 3 3/4 cents to US$5.50 1/4.

The market has no bullish news and drifted lower in thin overnight trade, traders said. The poor demand picture weighing on the market was highlighted by the U.S. Department of Agriculture's weekly export sales figures Thursday morning.

Net sales of 221,300 metric tonnes were below last week's total of 345,000 metric tonnes and below the trade's modest expectations of between 350,000 and 550,000 tonnes.

"Export sales were horrible," a trader said. "The demand is not there."

Wheat's losses could be limited by firm outside markets, including corn and soybeans. A weaker dollar could also support commodities generally.

Trade is expected to be light during Thursday's abbreviated session. The market closes early at 1 p.m. EST, and will be closed Friday for the Christmas holiday.

The next downside price objective for the bears is pushing and closing March prices below solid technical support at the November low of US$5.07 1/2, a technical analyst said. The bulls' next upside price objective is to push and close March futures prices above solid technical resistance at last week's high of US$5.48 a bushel.

First resistance is seen at this week's high of US$5.30 and then at US$5.37 1/2, the technical analyst said. First support lies at Wednesday's low of US$5.18 3/4 and then at last week's low of US$5.14 1/4.