August 29, 2008


US Wheat Review on Thursday: Stumbles on chart weakness, world supplies



U.S. wheat futures ended lower Thursday, succumbing to technical weakness and abundant world supplies.


December CBOT wheat ended 14 3/4 cents lower at US$8.11, December KCBT wheat settled 15 3/4 cents lower at US$8.47 1/4, and December MGE wheat finished 15 1/2 cents lower at US$8.73.


Technical weakness was the overriding factor in the market's declines, with improved crop conditions in Australia and Argentina adding to an outlook for plentiful world supply, said Joe Victor, analyst with Allendale Inc.


Disappointing weekly wheat exports helped add to the defensive tonnee, with spillover from corn and borrowed weakness from crude oil aiding the losses, traders added.


There is a lot of world wheat, and when you add in some negative technicals, you have the recipe for some price pressure, said a CBOT floor analyst.


Otherwise, he added, futures had little fresh stimulus to direct prices, with traders unwilling step in front of the market until it shows some signs of consolidating.


In CBOT pit trades, buyers and sellers were scattered among various commission houses, with speculative fund-selling estimated at 3,000 lots.



Kansas City Board of Trade


KCBT wheat futures ended lower in quiet trading, floor traders said. The feature of the day was the rolling and liquidation of September contracts ahead of Friday's first-notice day, traders said. The September/December spread held within a narrow 23-cent-to-23 3/4-cent range, with traders anticipating light deliveries ahead of the holiday weekend.



Minneapolis Grain Exchange


MGE wheat futures ended lower, as contracts came under a decent amount of hedge pressure with the spring wheat harvest just over half way completed, a MGE floor analyst said. The long position holders were busy exiting September contracts, with the rolling of positions through spreads featured as well.


The September/December spread widened out to an 18-cent carry from 13 cents Wednesday, leading floor traders to believe not many deliveries will be posted amid the significant carry in the market, analysts added.


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