US wheat futures were very volatile on Thursday ahead of the release early Friday of the US Department of Agriculture's January crop data, traders and analysts said.
The old-crop, or nearby, wheat contracts were climbing while the new-crop, or deferred, months fell on expectations USDA will trim bushels from its estimate for US old-crop carryover while boosting sharply its outlook for winter wheat acreage for harvest in 2008.
"Chicago was leading the other markets, and I think a lot of them were short going into tomorrow's report and covered," Shawn McCambridge, an analyst for Prudential Financial, said, referring to the Kansas City Board of Trade and the Chicago Mercantile Exchange wheat markets.
McCambridge also said the March contract bounced off of technical support around $8.79-1/2 per bushel, which was in the area of a double-bottom on daily bar charts. At 10:33 am CST (1633 GMT), CBOT wheat was up 6 to down 7-1/2 cents, with March up 5-1/2 at $8.95 per bushel. July was down 6 cents at $7.85 per bushel.
USDA said 190,900 tonnes of wheat were sold for export last week, below estimates for 200,000 to 400,000 tonnes. DTN Meteorlogix said Thursday there was no significant precipitation expected for the US Plains over the next week and much colder weather was expected by the middle of next week.
Key technical support in the March contract was at its 50-day moving average of $8.72-1/2 per bushel and the nine-day relative strength index stood at 45. Traders view an RSI of 30 or less as one indication of an oversold market and 70 or more as an indicator of an overbought market.