August 8, 2006

 

US Wheat Review on Monday: Lower; follows corn, soybeans

 

 

U.S. wheat futures ended lower Monday, following the lead of corn and soybeans amid the absence of fresh market moving influences, analysts said.

 

CBOT September wheat futures ended 3 cents lower at US$3.93, September Kansas City wheat settled 1 1/2-cent lower at US$4.84 1/2 and Minneapolis September wheat ended 1 1/2-cent per bushel higher at US$4.80 3/4.

 

Wheat was a follower Monday, with corn and soybeans providing direction, said Shawn McCambridge, senior grains analyst with Prudential Financial in Chicago. The market is shifting its focus away from production to demand possibilities, and with export news quiet aside from news of a tender from India, futures had little to drive prices, he added.

 

The price weakness was seen across all U.S. wheat markets, with analysts viewing the India tender as mildly supportive, as the trade needs confirmation of additional business to spark significant buying interest, traders said.

 

Talk of demand potential has provided psychological support to prices, but until a steady flow of confirmed sales emerge to generate solid upside potential, activity may remain choppy, McCambridge added.

 

Meanwhile, State Trading Corp. of India (512531.BY), or STC, plans to buy 330,000 metric tonnes of wheat from Switzerland-based trading house Agrico Trade and Finance SA at a price of US$210-US$212 a metric tonne, cost and freight, a senior Indian government official said late Monday.

 

The sale was not a surprise, but volume total was a bit larger than expected, said McCambridge.

 

After the close, the U.S. Department of Agriculture is scheduled to release its weekly crop progress report at 4 p.m. EDT (1500 GMT). Analysts anticipate the spring wheat harvest will come in near 50% complete. In CBOT pit trades, buyers were scattered among various commission houses. Calyon Financial sold 1,000 September, Citigroup sold 500 September, with Prudential Financial and Rosenthal each selling 300 September.

 

 

Kansas City Board Of Trade

 

KCBT wheat futures ended lower in unison with other U.S. wheat markets, taking their cue from corn and soybeans in very light trade, said a KCBT floor broker. The market tried to climb back from early declines, but without from directive news, choppy activity ensued, he added.

 

 

Minneapolis Grain Exchange

 

MGE wheat followed the same path as other U.S. wheat futures followed Monday, stumbling lower in quiet trade. Traders said weakness in corn and soybeans were more of an influence on prices than anything else, as traders were content to sit on the sidelines, with no individual players reported over a couple hundred contracts. There was a little selling reported from the country, but otherwise little activity was reported, said a MGE commission house broker.