February 9, 2006


US Wheat Review on Wednesday: Higher as kansas city board of trade sets new contract high



U.S. wheat futures ended higher Wednesday in choppy trading as light fund buying boosted prices, with wheat futures in Kansas City leading the way, sources said. KCBT March set a new contract high for the fifth consecutive session, they added.


CBOT March wheat rose 5 cents to US$3.56 3/4 per bushel; KCBT March surged 13 1/2 cents to US$4.26 1/2; and MGE March wheat gained 7 1/2 cents to US$4.09 1/2.


"It's the fifth consecutive day that KCBT March made a new contract high," said Brian Hoops, president of Midwest Marketing Solutions in Yanktonne, S.D.


The funds want to own hard red wheat futures because of the current tight stocks situation and ideas that this year's stocks will be tight as well, he added.


Kansas City helped lift Chicago and Minneapolis, a floor analyst said. The fund buying was not very big, but there was not much sustained selling either, he added.


Also, the conditions in the southern Central Plains remain very dry and the market is still waiting on the Iraqi wheat tender, the analyst noted.


It looked like the market was chasing itself, a commercial-connected trader said, with the funds running the market Wednesday. Light buying would move the market, but it was choppy with little support at the higher levels, he said.


And, outside markets that sold off sharply Tuesday, stabilized Wednesday, he added.


The U.S. Department of Agriculture is scheduled to release the February supply and demand report at 7:30 a.m. CST (1330 GMT) on Thursday.


In a survey of analysts conducted by Dow Jones Newswires, the average ending stocks figure of 11 analysts surveyed was 536 million bushels, slightly below the 542 million estimated by the USDA in January.


On technical charts, CBOT, KCBT and MGE March futures all traded an outside day, above Tuesday's high and low levels.


In CBOT trades, Fimat bought 1,500 March; O'Connor bought 600 March; Merrill Lynch bought 500 March; JP Morgan bought 400 March; Calyon Financial bought 300 March; and the Refco division of Man Financial bought 200 March.


UBS sold 2,100 March; Fimat sold 500 March; and ABN Amro sold 200 March.


Commodity fund buying was estimated at 1,000 contracts.


In KCBT trades, Man Financial bought 700 March and 500 May, and ABN Amro bought 200 July.


In other wheat news, the market is still waiting on the results of Iraq's recent tender for up to 1 million metric tonnes of optional origin wheat.


The USDA is scheduled to release the weekly export sales report Thursday at 7:30 a.m. CST (1330 GMT). Analysts expect wheat sales of 200,000-400,000 metric tonnes for the week ended Feb. 2.