February 27, 2007

 

US Wheat Review on Monday: Ends mixed on profit-taking, weak corn

 

 

U.S. wheat futures ended mixed Monday and near session lows, unable to maintain early advances as profit-taking and a sell-off in corn futures in late activity pressured prices, floor traders said.

 

Chicago Board of Trade March wheat fell 1 1/4 cents to US$4.83, Kansas City Board of Trade March wheat rose 1 1/4 cents to US$5.07 3/4, and Minneapolis Grain Exchange March wheat settled 4 cents lower at US$5.14.

 

CBOT March wheat was unable to fill a gap on daily technical charts established at the beginning of the year, and that led to profit taking, said John Kleist, senior analyst with Top Third Ag Marketing in Chicago.

 

Although March traded to its highest level of the calendar year during the session, that price level is also an area of long-term resistance, Kleist said.

 

People came into the session thinking prices would be sharply higher based on the overnight gains, and when that didn't happen, participants took profits, a CBOT commission house analyst said.

 

Light technical sell-stops near the close kept wheat under pressure, a floor trader said.

 

Kleist said the market hasn't had an export sales report since these price levels were reached, adding that it will be interesting to see if demand for U.S. wheat remains at its previous level.

 

During the session USDA reported weekly wheat export inspections were 23.1 million bushels, slightly above analyst estimates and the 18.5 million bushels inspected last week.

 

Wheat prices Tuesday will be dictated by corn and soybeans, that has been the pattern since October and will probably remain until demand resurfaces and lets wheat stand on its own, said Kleist.

 

On daily open auction technical charts, CBOT May traded an outside day with a higher high and a lower low than Friday's trading range and settled above its major moving averages.

 

In CBOT trades, Man Financial bought 400 May and sold 400 July and JP Morgan bought 200 May and Calyon sold 500 May.

 

Floor traders estimated fund activity as even on the day.

 

 

Kansas City Board of Trade

 

Hard red winter futures finished with modest gains as the market was able to post small advances despite the weakness in corn, a KCBT floor trader said.

 

Corn's inability to maintain early gains wasn't impressive and as it sold off, hard red struggled to remain in positive territory and ended near the day's lows, the floor trader said.

 

On daily open auction technical charts, May wheat traded at its highest level since last year and settled at its highest level since late December.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures ended mixed with the nearby months finishing lower on the weakness in Chicago, but the deferred contracts moved higher, making new life of contract highs in the July through December contracts.

 

Light fund buying provided early support to spring wheat, and the market didn't follow corn futures as closely as in previous sessions, a floor broker said.

 

Fund buying was estimated at 1,000 contracts.

 

On daily open auction charts, May spring wheat traded at its highest level since Dec. 1.