January 28, 2006
US Wheat Review on Friday: Ends mixed after kansas city board of trade , minneapolis grain exchange set new highs
U.S. wheat futures ended mixed Friday, with Chicago Board of Trade and Kansas City Board of Trade contracts mostly lower on late profit-taking into month-end booksquaring, brokers said.
Active index fund buying in deferred CBOT December wheat and trend-based speculative buying in nearbys boosted CBOT wheat initially, along with support from gains in CBOT soybeans and corn, they noted.
KCBT and Minneapolis Grain Exchange wheat futures set new contract highs across the board, with KCBT March topping US$4.00 per bushel as traders awaited Saturday's expected close of an Iraqi tender of 1 million metric tonnes of optional origin hard wheat.
Traders said the U.S. is hoped to garner much of total, and midday HRW barge bids shot up 2 cents to 7 cents, cash sources said.
KCBT new-crop contracts were also supported by U.S. crop worries as a drought lingers across key growers Texas and Oklahoma. Late week rains may fall east of the driest U.S. Southern Plains fields, meteorologists said.
CBOT March wheat ended Friday down 1 cent at US$3.43 1/2; May ended down 1 cent at US$3.54 3/4 per bushel.
Commodity funds bought about 4,200 CBOT wheat contracts during Friday's open outcry session, brokers said.
Deutsche Bank bought about 2,700 December; Citigroup bought 1,200 March; and Rand Financial sold 500 July versus Kansas City July, brokers said.
Cash U.S. soft red winter wheat midday barge bids were steady Friday, sources said.
Overnight U.S. wheat export news was quiet.
In global wheat news, Argentine farmers have finished collecting the 2005-06 wheat harvest, the Agriculture Secretariat reported Friday. Production totaled 12 million metric tonnes.
Australian producers said they still support the continuation of an export monopoly system for their product, but support is waning for the current monopoly manager, AWB Ltd. (AWB.AU), which is the subject of an ongoing inquiry into whether it breached Australian law by allegedly paying kickbacks to the deposed regime of Saddam Hussein.
The news followed the U.S. Wheat Associates' call Thursday for the U.S. Department of Agriculture to reinstate a suspension against AWB to keep it from participating in U.S.-run export credit programs.
USDA lifted the suspension in November after Australia promised to investigate allegations that AWB made illegal payments to Iraq while participating in the United Nations' Oil for Food Program.
Kansas City Board of Trade
KCBT March wheat closed Friday down 1 3/4 cents at US$3.93 3/4 per bushel, after setting a contract high of US$4.02; May ended steady at US$3.98 1/2.
KCBT/CBOT March wheat spread settled Friday at 51 1/4 cents, premium KCBT, after closing Thursday at 51 cents, premium KCBT.
Kansas City spot cash railcar basis bids for 11% and 12% protein wheat fell 2 cents while bids for 13% fell 3 cents and bids for 14% protein fell 2 cents Friday, according to the KCBT.
Minneapolis Grain Exchange
MGE March closed Friday up 1/2 cent at US$3.99 3/4 after setting a new contract high of US$4.04.
May wheat settled up 3/4 cent at US$4.04 per bushel after setting a new contract high of US$4.07. All other deferred traded contracts also set contract highs.
Cash U.S. spring wheat basis bids were mixed Friday, cash sources said.
Minneapolis rail receipts of wheat on Friday totaled 187 cars versus last year's 161 cars. Durum receipts totaled 109 cars versus last year's 40 cars.