January 23, 2006

 

US Wheat Outlook on Monday: Up 1 cent on e-CBOT, following corn, soy

  

 

U.S. wheat futures were called to open up 1 cent Monday after firm overnight trade and following calls for a higher open in Chicago Board of Trade corn and soybean futures, brokers said.

 

Soybean futures were called to open up 6-8 cents on forecasts for upcoming hot, dry weather in Argentina's soy growing belt, they noted.

 

"Wheat is still a bit of a follower here," said Don Roose, of U.S. Commodities. "Wheat traders are also continuing to follow murky (U.S. Southern Plains) forecasts, which now call for a bit of rain in the drier hard red wheat sections later this wheat."

 

In the overnight e-CBOT session, most-active March wheat at the Chicago Board of Trade closed up 1 1/2 cents at US$3.28. First technical support was put at US$3.24 - Friday's low - and then at US$3.21 1/2 - last week's low.

 

Cash U.S. hard red winter wheat basis bids were mostly steady Monday; soft red winter wheat basis bids were steady to firm; and spring wheat basis bids were steady to down 1 cent at Portland, Ore., grain merchandisers said.

 

Overnight U.S. wheat export sales were quiet while Iraq confirmed news of last week's tender to buy 100,000 to 150,000 tonnes of optional-origin hard wheat for delivery in March and April. The tender will close Jan. 28.

 

Monday's U.S. wheat futures gains could be limited after Syria said Monday it had sold about 300,000 metric tonnes of soft Syrian wheat to Egypt, US Commodities' Roose noted.

 

"There is a decent amount of wheat available globally at competitive prices," he noted.

 

In other global news, India's wheat plantings totaled 26.1 million hectares in the Nov. 1-Jan. 23 period, compared with 25.9 million hectares in the year-earlier period, the Ministry of Agriculture said Monday.

 

The Indian wheat crop is tentatively forecast at 74-76 million tonnes, with sources continuing to closely follow northern India rainfall.

 

The CFTC reported Friday that speculators in CBOT wheat futures for the week ended January 17 increased short holdings by 1,307 lots to hold 77,243 short positions and decreased their long holdings by 3,436 lots to hold 53,875 long positions.

 

For CBOT wheat futures and options combined, speculators were short 72,763 lots, up 644 contracts from the week before, and long 54,883 contracts, down 2,975 lots from the previous week.

 

For KCBT wheat futures only, speculators for the week ended Jan. 17 cut their net long stance. They decreased their long holdings by 2,246 lots to hold 45,659 long positions and increased their short holdings by 729 lots to hold 5,085 short positions.

 

For KCBT wheat futures and options combined, speculators were long 44,801 lots, down 2,814 contracts, and short 2,866 contracts, down 110 lots from the previous week.

 

For MGE spring wheat futures only, speculators for the week ended Jan. 17 increased their net long position, boosting long holdings by 1,350 lots to 11,307 lots and increasing short holdings by 95 lots to 921 lots.

 

For MGE spring wheat futures and options combined, speculators also boosted their net long position, increasing long holdings by 1,357 lots to 10,963 contracts and increasing short holdings by 95 lots to 940 contracts.