CBOT wheat futures lower on speculative profit taking

Speculative profit taking knocked Chicago Board of Trade wheat futures to a lower close on Wednesday, traders said.
Wheat early this week rallied to one-month highs on enthusiasm over the sale of a large amount of US wheat to China. That rally left the market technically overbought and due for a profit-taking setback, traders said.
The nine-day relative strength index for March stood at 70 ahead of the open on Wednesday. Technical traders view an RSI of 70 or more as a sign that the market is overbought.
CBOT wheat closed 1-1/2 to 7 cents per bushel lower, with March down 5-1/4 at $3.87-1/4. May was down 4 at $3.94-1/2.
Volume was large estimated at 30,140 futures and 4,677 options.
Despite the technical setback, fundamental support in the wheat market continues to stem from recent buying of US wheat by China. USDA has confirmed that China recently bought 855,000 tonnes of US wheat.
Exports overnight were routine, with Taiwan buying 26,830 tonnes of US wheat and South Korea tendering for 23,600 tonnes from the United States.
New-crop July held firm relative to the nearby months amid dry weather in parts of the Great Plains HRW region.
But it might rain soon in the drier areas of the US Great Plains hard red winter wheat region, a private forecaster said on Wednesday.
"The bottom line is there is a system on Sunday or Monday that has the potential for precipitation in most areas of the wheat belt," Meteorlogix forecaster Joel Burgio said.
Dry weather since late last summer has been stressing the crop in the West, and there also has not been enough snowfall this winter to help recharge soil moisture reserves.
Position-squaring in March remained a feature as traders rolled positions from the March to the deferred contracts ahead of Friday, first notice day for deliveries on the March. CBOT wheat registrations on Tuesday totalled 1,960 contracts, unchanged from Monday.
Technical support in the March contract at $3.88-1/2 was broken, driving the contract to a session low of $3.83. Resistance is at $3.94-1/2.