March 20, 2006

 

US Wheat Outlook on Monday: 4-6 cents lower on precipitation, e-CBOT

 

 

U.S. wheat futures are predicted to begin Monday's daytime trading session 4-6 cents lower following precipitation in the U.S. Central Plains over the weekend, additional precipitation expected Monday, and lower prices in overnight trading, sources said.

 

In overnight activity, May wheat fell 5 cents to $3.52 1/2 per bushel, and July declined 5 1/2 cents to $3.64 1/2.

 

Overnight at the KCBT, May fell 7 3/4 cents to $4.13 3/4 and July fell 6 1/2 cents to $4.16.

 

The market is looking for a push lower this morning after the moisture this weekend in the hard red wheat belt, a CBOT-based floor analyst said.

 

Precipitation over the weekend averaged .25-1.00 inch through eastern and central Kansas and .10-.50 inch elsewhere in the region, DTN Meteorlogix Weather Service said.

 

Snow and rain changing to snow is forecast Monday with amounts over the next 24 hours averaging .30-1.50 inches and locally heavier. Snowfall is expected to average 7-15 inches in western and northern Kansas and southern Nebraska. Snowfall should average 4-8 inches in central Kansas and temperatures should average well below normal. DTN Meteorlogix added.

 

The hard red crop needed moisture and it got it, a floor trader said. The premium put in the market Friday is likely to come out in today's session, he added.

 

In the eastern U.S. Midwest soft red wheat growing region, rain is likely in the Delta and lower Ohio river valley Monday and Tuesday, with temperatures averaging well below normal during this time, Meteorlogix weather said.

 

On technical charts, chart damage has occurred to suggest a market top is in place, a technical analyst said. He sets first resistance in CBOT May at $3.59, and then at $3.65. First support is seen at Friday's low of $3.54 and then at $3.50.

 

For May KCBT, bears still have some downside technical momentum. First resistance is seen at $4.23, Friday's high and then at $4.25. First support is seen at $4.16, Friday's low and then at $4.12, last week's low.

 

Large non-commercial speculators are net long a combined 13,094 CBOT wheat futures and options as of March 14, the Commodity Futures Trading Commission reported Friday.

 

Large non-commercial speculators are net long 43,462 KCBT wheat futures and options on futures as of March 14, the CFTC reported.

 

At the MGE, large non-commercial speculators are net long 10,575 wheat futures and options on futures contracts, the CFTC reported Friday.

 

Cash wheat basis bids were unchanged to higher Monday morning. Soft red wheat basis bids were mostly unchanged with Cincinnati 2 cents higher at 23 cents under the May future.

 

Hard red wheat basis bids were mostly unchanged with Hutchinson, Kan. unchanged at 11 cents under the May.

 

Hard spring wheat basis bids were mixed with Minot, N.D. unchanged at 39 cents under the May future.

 

In other wheat news, Jordan bought 300,000 metric tonnes of soft milling wheat from Syria, outside the tender process, sources said. The wheat was purchased from Syria's General Establishment for Cereal Processing or Hoboob.

 

On Monday, the U.S. Department of Agriculture is scheduled to release the weekly export inspections report at 10:00 a.m. CST.