March 2, 2006
US Wheat Review on Wednesday: Lower on consolidation, kansas city board of trade declines
U.S. wheat futures finished moderately lower Wednesday as the market consolidated after several contracts made new life-of-contract highs recently.
Moderate losses in hard red wheat futures at the Kansas City Board of Trade added additional selling pressure.
CBOT wheat has been following hard red wheat futures, and as KCBT futures weakened, Chicago followed, a commission house analyst said.
Spillover from Tuesday's weak close and losses in corn futures added to the negative tonnee, floor sources said.
The market acted weakly all day, a floor analyst said. It spent the session consolidating at lower levels, but there wasn't much to buy at those prices, so it continued to work its way lower, he added.
Above-average temperatures to well-above-average temperatures are forecast for Wednesday and Thursday in the U.S. Central Plains with only very light shower activity expected in the period, DTN Meteorlogix weather said.
A chance for scattered sprinkles and light showers is predicted over the weekend. Rainfall should average a trace to .10 inch in the west to .10-.50 inch and locally heavier in eastern sections of the region, Meteorlogix said.
On technical charts both May and July futures settled below their 10-day moving averages for the first time since Feb. 15.
CBOT March wheat declined 7 1/2 cents to US$3.62 3/4 per bushel. May wheat fell 7 cents to US$3.74, and July settled 8 1/4 cents lower to US$3.85 1/4.
In CBOT trades, O'Connor bought 1,000 May and 200 July, Calyon Financial bought 1,000 May, ABN Amro bought 800 May, R.J. O'Brien bought 700 May, and Citigroup bought 200 May and 100 July.
JP Morgan sold 700 May, Fimat sold 1,000 May, O'Connor sold 300 July, the Refco division of Man Financial sold 300 May, Goldenberg-Hehmeyer sold 500 May and Rand Financial sold 200 December.
Kansas City Board of Trade
KCBT wheat futures finished moderately lower as "the potential chance for rain over the weekend made people nervous," a KCBT floor trader said. The possibility for rain made the longs nervous with some liquidating positions, he added. Technical selling also added to the declines, floor sources said.
On technical charts, both May and July KCBT settled below their 10-day moving averages for the first time since Feb. 15.
March fell 6 cents to US$4.33 per bushel with May ending 10 3/4 lower cents to US$4.34 3/4. July settled 7 3/4 cents lower at US$4.36 3/4.
In KCBT trades, ADM Investor Services bought 300 May and 400 July, ABN Amro bought 300 May and 400 July and the Refco division of Man Financial bought 400 May and 100 July.
FC Stonnee sold 300 May and 300 July, Shay Grain sold 400 May and 100 July, and Fimat sold 2,000 May and 300 July.
Minneapolis Grain Exchange
Spring wheat futures settled lower as the losses in hard red wheat futures at KCBT spilled over into spring wheat futures, sources at the MGE said. The lack of open positions helped exaggerate the losses in the March contract, sources said.
Open interest in March stood at 777 contracts as of Tuesday, according to the MGE We bsite.
MGE March wheat fell 14 1/2 cents to US$4.10, with May down 12 cents at US$4.16.
On Thursday, the U.S. Department of Agriculture is scheduled to release the weekly export sales for the week ended Feb. 23. Analysts expect sales between 300,000-500,000 metric tonnes. Sales for the week ended Feb. 16 totaled 589,400 metric tonnes.