November 1, 2005

 

US Wheat Outlook on Tuesday: Up 1 cent on technicals, higher soy calls

  

 

U.S. wheat futures were called to open up 1 cent per bushel Tuesday on a technical bounce after recent losses and on calls for a 2 to 4 cent higher open in Chicago Board of Trade soybean futures, brokers said.

 

Soybeans were called to open firm on overnight gains in China's Dalian futures market, they noted.

 

Gains in the wheat market could be limited Tuesday amid slow U.S. wheat export news, including a lack of confirmation about last week's rumored sale of 1 million metric tonnes of U.S. wheat to Iraq, they noted.

 

In the overnight e-CBOT session, most-active December wheat at the CBOT closed up 1 cent at US$3.18 after closing Monday near the session low and at the lowest closing level in nine months.

 

"The bears are in near-term technical control but the market is overdone on the downside, technically, and due for at least a corrective upside bounce soon," said Jim Wyckoff, a technical analyst. "It will take a close back above US$3.35 to provide the bulls with fresh upside momentum."

 

First resistance for CBOT December wheat was seen at US$3.19 1/2 -Monday's high - and then at US$3.23. First support was put at US$3.16 -Monday's low - and then at US$3.15 - the contract low.

 

Forecasts called for dry conditions and warming temperatures across the U.S. Plains and Midwest winter wheat growing areas following rains during the past week that aided crop development, sources said.

 

The U.S. Department of Agriculture reported late Monday that 61% of the winter wheat crop was in good-to-excellent shape, up 4 percentage points from last week but still 17 percentage points behind last year's rating of 78%.

 

Ninety-two percent of the U.S. winter wheat crop was planted as of Oct. 30, up 4 percentage points from both last year and the average.

 

The crop was 76% emerged, up 1 percentage point from last year and 3 percentage points above the long-term average.

 

In global wheat news, traders continued to eye early wheat harvest weather in key global exporters Australia and Argentina.