March 1, 2006

 

US Wheat Review on Tuesday: Lower on modest selling late

 

 

U.S. wheat futures ended mostly lower Tuesday in choppy, two-sided activity, sources said.

 

New life-of-contract highs were set in several months' at all three U.S. wheat futures markets near mid-morning.

 

However, a lack of follow through buying led to profit taking with futures tumbling at the close, sources said.

 

Modest selling interest near the close, helped push futures to their lows of the session. There was little buying interest late, a floor analyst said.

 

Trading was directionless for much of the session, a cash-connected trader said. The market doesn't know where to go from here, he said. It rallied to these levels on the strength in hard red wheat, but Chicago wheat is not very competitive right now due to the price, he added.

 

The absence of fresh news also limited any strength, sources said.

 

News that India would purchase 500,000 metric tonnes of Australian wheat was expected by some traders and had little impact, a floor trader said.

 

Above-average temperatures with little chance of moisture over the next several days in the U.S. Central Plains continues to provide underlying support to wheat futures, sources said.

 

The next chance for precipitation in the region is during the early part of the weekend, with moisture averaging 0.10 inch in the west to 0.10-0.75 inch in the eastern sections, DTN Meteorlogix weather said.

 

CBOT March wheat fell 3 cents to US$3.70 1/4 per bushel. May wheat declined 4 3/4 cents at US$3.81. May did set a new contract high of US$3.90 1/2.

 

In CBOT trades, Fimat bought 1,800 May, Iowa bought 500 May, Goldenberg-Hehmeyer bought 300 May and JP Morgan bought 200 July.

 

JP Morgan sold 500 May, 400 July and 200 September late, ABN Amro sold 1,300 May in a spread against soybeans, Calyon 400 May and Citigroup sold 200 May.

 

Commodity fund buying was estimated at 800 contracts.

 

 

Kansas City Board of Trade

 

KCBT wheat futures settled modestly lower after making new contract highs early in the day. Wheat futures "gave up the ghost late," a KCBT trader said, with the late weakness tied into Chicago losses at the close, he added.

 

Light fund buying had helped provide support early in the session, he noted.

 

March slipped 1 1/2 cents to US$4.39 per bushel with May down 1 cent to US$4.45 1/2. May set a new high of US$4.53 1/2 during the session.

 

In midday KCBT trades, the Refco division of Man Financial bought 100 May and 200 July and sold 100 May and 100 July. FC Stonnee sold 150 May, 200 July and 150 December, Fimat bought 100 March and 150 July, UBS bought 300 July and 100 May, and ADM sold 300 July.

 

 

Minneapolis Grain Exchange

 

Spring wheat futures finished mostly lower as the declines in Chicago and Kansas City helped limit buying interest in MGE futures, a floor source in Minneapolis said. March spring wheat futures finished higher as there is little open interest in the spot month and light buying in it tends exaggerates price movements, he added.

 

MGE March wheat ended 5 1/2 cents higher at US$4.24 1/2, with May down 1 1/4 cents at US$4.28. New life-of contract highs were also set in several MGE months.