February 11, 2006

 

US Wheat Review on Friday: Declines on fund selling, outside markets

 

 

U.S. wheat futures ended lower on Friday, weighed down by weaker markets in precious metals, crude oil and a decline in the CRB Index, sources said. The lack of fund buying after recent strength and fund selling also added to the weakness, sources added.

 

CBOT March wheat declined 8 cents to US$3.55 1/4 per bushel, KCBT March slipped 3 3/4 cents to US$4.30, and MGE March wheat declined 5 cents to US$4.10

 

There was a lack of buying interest from the funds early on, outside markets were weaker and then the funds turned into light sellers and that was the "kiss of death" for the long side, said Vic Lespinasse, of AG Edwards & Sons.

 

It was a down day for wheat, a commission house analyst said. The CRB was down, light fund selling ran into some sell stops and that pushed it lower, he said.

 

Talk that a private weather forecaster has added some precipitation in the hard red wheat belt next week, added to the weak tonnee in KCBT wheat, sources there said.

 

The market seemed tired today, with little fresh news to trade off of, a floor trader said.

 

People are looking for Iraq to buy at least 800,000 tonnes from either Australia or the U.S., with anything less viewed negatively, the trader said.

 

After being delayed several times, the results of the Iraqi wheat tender are expected to be released Sunday, sources said.

 

In CBOT trades, Man Financial bought 500 May, Cargill bought 500 March, ABN Amro bought 500 March, Goldenberg-Hehmeyer bought 300 March and O'Connor bought 200 March.

 

O'Connor sold 1,000 July, Fimat sold 1,000 July, Calyon Financial sold 1,000 July, JP Morgan sold 800 March, Rand sold 500 July and the Refco division of Man Financial sold 500 March.

 

Commodity fund buying was estimated at 4,200 contracts.

 

In KCBT trades, Fimat sold 300 March and 100 May, Frontier Futures sold 100 May, UBS sold 100 March.

 

On Friday after the close, the Commodity Futures Trading Commission will release the commitment of trader's data as of Feb. 7.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report for Feb. 9. -By Joe Poncer; Dow Jones Newswires; 312-341-5778; joe.poncer@dowjones.com