Wheat futures at the Chicago Board of Trade closed firm on late short-covering with the market finding good support around the $4.00 per bushel level in the bellwether May contract, pit sources said.
In early trading, the market fell to a one-week low amid lingering pressure from the news late last week that Australia landed most of the World Food Program award of wheat to Iraq, traders said.
However, selling dried up when the $4.00 level was briefly penetrated, and the session low for May stood at $3.98. CBOT wheat closed 1/2 to 3 cents per bushel higher, with May up 1/2 at $4.05-3/4.
Pit sources said positioning and book-squaring were the dominant factors ahead of the release early Wednesday of several key reports by the US Department of Agriculture (USDA).
USDA on Wednesday will release its quarterly stocks and planting intentions report. An average of analysts' estimates pegged this year's US all wheat sowings at 59.854 million, below last year's 61.700 million.
The analyst average for the US wheat stockpile on March 1 was 1.037 billion bushels, above the 907 million on March 1, 2003. The market struggled against the backdrop of recent bearish input from the export sector.
USDA early Monday confirmed that US exporters sold Iraq 165,000 tonnes of hard red winter wheat, but Australia said last week it had landed the lion's share of the business at 460,000 tonnes.
Exports were quiet over the weekend and the wheat market remained heavily loaded with speculative long positions, leaving it vulnerable to a slide.
USDA early Monday said 23.446 million bushels of wheat were inspected for export during the week ended last Thursday, above trade estimates for 15.0 million to 20.0 million bushels.
Friday's CFTC commitments of traders report showed large speculators sharply increased their net long position during the week ended last Tuesday. Funds were long 52,261 contracts, up 17,307, and short 16,085, down 13,371 from the week before.
Dry weather in parts of the Plains hard red winter wheat region may have aided the advances in new-crop July, especially the KCBT July HRW contract. Rains are forecast for the Plains by the weekend but little or no moisture is expected in the driest portion of the Plains.
Technical support in the May contract at $4.04-1/2 was broken, driving the contract to a session low of $3.98. Resistance was at $4.07-1/2. The nine-day relative strength index for May stood at 57 prior to the open on Monday. Chartists view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.
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