CBOT wheat futures mixed, choppy

Soft red winter wheat futures at the Chicago Board of Trade closed mixed on Tuesday in choppy trade dominated by spread trade as firms rolled their December positions before first notice day, traders said. Pit sources said pressure on prices came from spillover selling by speculators after a sharp drop in KCBT hard red winter wheat futures. CBOT wheat closed 2-1/2 cents per bushel lower to 1/4 cent higher, with December down 1-1/2 at $3.00-1/2 per bushel.
Some support came from a slight recovery from Monday's lower close, which was triggered, by a late wave of selling by commodity funds. A firm tone in soyabean futures also helped underpin wheat futures prices.
First notice day for December wheat is November 30. Exports were routine overnight, and Taiwan set a tender for Wednesday to buy up to 43,000 tonnes of US wheat. Traders said futures need evidence of some large volume export business in order to boost prices. There has been talk in export circles that Iraq or Pakistan might be in the market for US wheat.
However, as of Tuesday, there had been no signs of purchases by either country. Wheat futures also are struggling with a lack of significant purchases by China. Traders in Hong Kong on Tuesday said Chinese wheat purchases are likely to drop in the 2004/05 year despite a new Australian deal.
On Monday, Australia's wheat exporter AWB Ltd said it had sold 1.5 million tonnes of wheat to China. That followed an October deal between China and France for 700,000 tonnes.
Gains in wheat futures were also slowed by good crop weather in the US winter wheat belt. USDA on Monday said 76 percent of the crop was in good to excellent condition. That's well above the 50 percent good to excellent rating of a year ago.
Cash basis bids in the Midwest were steady and farmer selling remained slow. Technical support in the December contract is at $3.00-1/4 per bushel with resistance at $3.06. The nine-day relative strength index for December is at 39.
Technical traders view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.