July 26, 2008

 

US Wheat Review on Friday: Rallies late on technical buying

 

 

U.S. wheat futures ended solidly higher Friday on technical buying, as traders covered short positions ahead of the weekend.

 

Chicago Board of Trade September wheat climbed 23 1/4 cents to US$8.11 per bushel. Kansas City Board of Trade September wheat jumped 15 3/4 cents to US$8.32 1/4, and Minneapolis Grain Exchange September wheat was up 16 1/4 cents at US$8.86.

 

The markets surged in late dealings after trading in positive territory throughout the day session. Nearby CBOT September wheat approached its 50-day moving average of US$8.31 1/2 with a session high of US$8.21, an analyst said.

 

Wheat was technically oversold and due for a rebound, traders said. The market was seen to be bouncing after recent losses.

 

CBOT September wheat ended up 7 cents on the week, which was "impressive considering the action you saw on the corn and the [soybeans]," said Jason Ward, analyst for Northstar Commodities. Corn and soybeans ended lower on the week.

 

Wheat is "divorcing itself from the row crops," Ward said. Commodity funds bought an estimated 3,000 contracts.

 

There was not much fundamental news out for the markets to feed on, traders said. U.S. wheat export demand continues to look stronger than expected amid forecasts for a record global crop and increased competition for export business.

 

"We are off to a pace of export sales that is quite robust right now," Ward said.

 

The closing date for a tender from the state-run Grain Board of Iraq is Sunday. The board last week issued the tender to buy at least 50,000 metric tonnes of optional-origin wheat. Offers will be valid until July 31, it said.

 

 

Kansas City Board of Trade

 

KCBT wheat futures rose on short covering in a rebound from recent setbacks, a trader said. The market felt support from the rally in CBOT wheat and from firmer CBOT corn and soybeans, he said.

 

It is typical for the markets to see a postharvest rally, a trader said. The U.S. Department of Agriculture will issue an update on the winter-wheat harvest Monday in the weekly crop progress report. As of Sunday, cutting was 71% complete.

 

The markets will continue to watch weather forecasts in the Southern Hemisphere for Australia and Argentina, an analyst said. Drought has slashed production in Australia for the past two years, but recent rains have benefited the crop, he said.

 

 

Minneapolis Grain Exchange

 

MGE wheat futures continued in its role as a follower of the other markets, a trader said. Volume was seen as relatively thin.

 

The market will get a look at the status of the U.S. spring wheat crop next week from the Wheat Quality Council's annual crop tour, which kicks off Tuesday in North Dakota. The HRS wheat crop is described as "spotty," and the durum crop is struggling with dryness in some areas.

 

The tour wraps up Thursday with the release of a final yield estimate around 3:45 p.m. EDT. The tour does not put out a production estimate.

 

Video >

Follow Us

FacebookTwitterLinkedIn