November 18, 2005


US Wheat Review on Thursday: Ends lower, led by fund sales in kansas city board of trade



U.S. wheat futures settled lower Thursday, led by technically inspired speculative sales at the Kansas City Board of Trade, where commodity funds hold a net-long stance, despite acceptable U.S. weekly wheat export sales news, brokers said.


The U.S. Department of Agriculture on Thursday reported U.S. wheat export sales for the week ended Nov. 10 totaled 565,300 metric tonnes for old and new-crop marketing years.


Net weekly U.S. wheat export sales for the 2005-06 marketing year of 564,300 metric tonnes, above the 332,400 level that some analysts noted were need on a weekly basis to reach the USDA's annual export forecast.


CBOT December wheat ended down 2 cents at US$3.04 3/4 per bushel, after setting a new contract low of US$3.03 3/4. CBOT March wheat closed down 1 1/2 cents at US$3.21, after making a new contract low of US$3.19 1/4.


Commodity funds sold about 1,000 CBOT wheat futures during the open-outcry session, led by Fimat's sale of 600 March, brokers said.


In spread trade ahead of the Nov. 30 first notice day for deliveries against December wheat futures, Man Financial spread 1,500 July/December, Calyon Financial spread 500 March/December and Fimat spread 400 December/March, they noted.


In overnight U.S. wheat export sales, Japan bought 60,000 tonnes of U.S. wheat in a tender totaling 100,000 tonnes.


In global wheat export news, Jordan bought 100,000 tonnes of Russian and Black Sea wheat, Jordan's Ministry said.


In other global wheat news, the European Union granted a total of 118,300 metric tonnes of free-market wheat exports at EUR5/tonne, compared with 208,000 tonnes at EUR5/tonne last week.


The E.U. also granted 29,308 metric tonnes of grain Thursday transferred to Spain, which was hit by a drought this year.


Cash spot U.S. SRW wheat basis bids were steady to firm Thursday, while spot midday Gulf SRW wheat basis bids were steady, grain merchandisers said.



Kansas City Board of Trade


KCBT December ended down 3 1/2 cents at US$3.54 1/4; and KCBT March closed down 3 cents at US$3.60 3/4, just above its 200-day moving average of US$3.59 after setting a two-month low of US$3.58.


The key KCBT/CBOT March wheat spread ended at 39 3/4 cents, premium March, continuing its correction from the Nov. 10 high of 49 3/4 cents. The spread has been popular since this summer as global demand for higher-protein U.S. wheat has outpaced that for amply supplied U.S. SRW wheat.


Support in the spread was seen at the 40-day moving average of the move from the July low to the Nov. 10 high of 34 1/2 cents.


Man Financial and Prudential Financial were featured sellers, with Man selling 1,100 December and 2,000 March on the session while buying 100 July and 100 September.


Prudential sold 1,000 December, 500 March and 200 July; while Cargill Investor Services sold a net 300 March and Fimat bought a net 300 March.


Cargill Investor Services spread 800 December/March, ADM spread 700 December/March and Fimat spread 600 December/March, while ADM Investor Services, Fimat and Prudential each also spread 400 March/December; and UBS spread 250 March/July, brokers noted.


Cash spot U.S. HRW cash basis bids were steady to firm, while spot midday U.S. Gulf HRW basis bids were steady, cash sources said.


Forecasts called for continued dry weather across the U.S. Southern Plains hard red winter wheat belt and above-normal temperatures during the weekend.



Minneapolis Grain Exchange


MGE December ended Thursday down 2 3/4 cents at US$3.70, just below its 50-day moving average of US$3.72 1/4; and March closed down 3 1/2 cents at US$3.73 3/4, also below its 50-day moving average of US$3.75 1/2 per bushel.


Cash spot U.S. spring wheat basis bids were steady to weak Thursday, with a 15-cent loss in the spot Minneapolis rail basis bid, cash sources said.