December 28, 2005
US Wheat Outlook on Wednesday: Flat-down 1 cent on e-CBOT, weak soy call
U.S. wheat futures were called to open flat to down 1 cent per bushel Wednesday following weak overnight trade and on calls for a flat-to-lower Chicago Board of Trade soybean open, brokers said.
CBOT March wheat rose to a 2-month high overnight before closing lower while Kansas City Board of Trade March hit a 2 1/2-month top on speculative buying in anticipation of long-only index fund buying early in 2006.
Speculative commodity funds remain heavily net short CBOT wheat futures and long KCBT and Minneapolis Grain Exchange wheat futures ahead of the New Year.
Moderate holiday trade was expected Wednesday, with traders eyeing Friday's 12 noon CST market closure and shuttered markets Monday in observance of New Year's Day.
In the overnight e-CBOT session, most-active March wheat at the CBOT closed down 1/2 cent at US$3.39 1/2 per bushel.
First chart resistance was seen at US$3.41 1/2 while secondary resistance was put at US$3.48. First support lies at US$3.36 and then at US$3.33.
Cash U.S. hard red winter wheat basis bids were steady to mixed Wednesday; soft red winter wheat basis bids were steady to firm, with a 4-cent gain in St. Louis and Memphis bids; and spring wheat basis bids were steady to weak, with a 10-cent loss in Minneapolis rail, grain merchandisers said.
Forecasts called for mostly dry conditions and above-normal temperatures across the droughty southern U.S. hard red winter wheat belt until Friday.
Overnight U.S. wheat export news was quiet.
The U.S. dollar was lower early Wednesday, ceding Tuesday's gains; strength in the dollar this year has made U.S. wheat more expensive to foreign buyers.
In global wheat news, market analyst APK Inform said Wednesday that Ukraine's wheat exports would likely hit 4 million metric tonnes by year-end and could amount to 5.5 million tonnes in the whole 2005-2006 marketing year.
Ukraine exported 4.375 million tonnes of wheat in the 2004-2005 marketing year.
