February 21, 2007

 

US Wheat Review on Tuesday: Ends lower on weak corn, buyers absent

 

 

U.S. wheat futures ended lower Tuesday, as the lack of buying interest and weaker corn futures kept prices on the defensive, sources said.

 

CBOT March wheat declined 3 1/2 cents to US$4.64 1/2, KCBT March wheat fell 2 1/2 cents to US$4.93, and MGE March wheat settled 2 3/4 cents lower to US$5.02 1/4.

 

Fresh supportive news was lacking, a CBOT floor broker said. Corn is the leader, and a bull market has to be fed everyday, and there was no news out for either corn or wheat, he added.

 

The prospects are for better world wheat crops than last year and that wasn't supportive, said Bill Nelson, associate vice president wih AG Edwards & Sons in St. Louis.

 

In addition, there is the potential for rain in the U.S. hard red winter belt over the near term, which would help the crop as it begins to leave dormancy, said Nelson.

 

India's agriculture minister said the country's wheat crop condition was good and that output this year may exceed its forecast of 72.5 million metric tonnes.

 

Ukraine's Agriculture Ministry announced Tuesday that its 2007 wheat crop is expected to be up over 27% from last year's 13.994 million metric tonne crop.

 

Weekly export inspections were within analyst expectations and had little impact, floor sources said.

 

The U.S. Department of Agriculture reported weekly export inspections were 17.353 million bushels, compared to the 13.271 million inspected last week.

 

Wheat was lower Tuesday on the lack of strength in corn futures but if corn is higher Wednesday, wheat will be well supported, the floor broker said.

 

On daily open auction technical charts, CBOT May traded an inside day within the parameters of Friday's trading range and settled below its 40-day moving average.

 

In CBOT trades, Fimat bought 200 May, JP Morgan bought 200 May and Rand sold 100 May.

 

 

Kansas City Board of Trade

 

Hard red winter futures ended at lower levels, with the market staging a modest pullback from Friday's gains, a KCBT floor source said. The March-May spread closed out of line Friday and the spread came back in a little Tuesday, he added.

 

Light fund selling also added to the weak tonnee, with fund selling estimated at 1,000 contracts.

 

In mid-day KCBT trades, Man Financial bought 200 May and sold 200 March, and Fimat sold 100 May and 100 July.

 

In mid-day spread trading, Fimat bought 250 March-May and General Mills bought 300 May-Mar.

 

On daily open auction technical charts, May wheat traded an inside day, and settled above most of its major moving averages.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended lower as an increase in country movement weighed on the May future early in the day, an MGE floor broker said. Ideas that Friday's gains were overdone and corn futures inability to make new highs also helped keep wheat on the defensive, he added.

 

Commodities in general were weak Tuesday with most markets on the defensive, a floor source added.