A late bout of selling by commodity funds drove Chicago Board of Trade wheat futures to a lower close on Monday, traders said. Pit sources said Cargill Investor Services sold 1,000 March and Man Financial sold 500 March in the waning minutes of trade. The selling drove the market into sell-stops when December broke through its 14 and 20-day moving averages. CBOT wheat closed 4 to 8-1/2 cents per bushel lower, with December down 7-3/4 at $3.02 per bushel.
March closed 7-3/4 lower at $3.12. Pit sources said MGE spring wheat futures took the lead on Monday and fell 1-3/4 to 9-1/4 cents per bushel on increased cash movement and on fund selling.
Wheat futures continue to get hit by bearish export news and good crop weather for the US winter wheat crop. There had been talk late last week that the US may sell some wheat to Iraq and/or Pakistan, but there was nothing over the weekend to indicate any business had been done.
There were further signs of stiff competition for export business. On Monday, wheat exporter AWB Ltd said it had secured a 1.5 million tonne wheat contract with China. Over the past year, China has bought 2.5 million tonnes of Australian wheat from AWB, the company said.
The USDA on Monday said 20.6 million bushels of wheat were inspected for export last week. The trade was expecting from 18.0 million to 20.0 million. Attempts to rally wheat futures also were being hampered by good crop weather in the US winter wheat growing region.
USDA has been rating the condition of the 2005 winter crop at a level well above the year-ago rating, leading to the potential for a good harvest next summer. Cash basis bids in the Midwest were steady.
Cash dealers late on Friday said wheat demand among millers increased last week. On Friday's CFTC commitments of trader's report showed that large speculators cut their net short in CBOT wheat in the week ended on Tuesday, November 16.
For futures, funds were long 35,756 contracts, up 1,717 from the prior week, and short 67,005, up 787. Technical support in the December contract lies at $3.00-1/2 per bushel with resistance at $3.20-1/2. The nine-day relative strength index (RSI) for December closed at 50. Technical traders view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.