US wheat futures drop

15 Mar, 2008

US wheat futures fell on Thursday on profit-taking after the strong rally on Wednesday, traders said. Wheat markets soared on Wednesday amid persistent buying by investment funds following the release early this week of bullish US. wheat supply and demand data from the US Department of Agriculture.
Chicago Board of Trade wheat closed 12 to 38-1/2 cents per bushel lower on Thursday with March down 36 at $12.34 per bushel. May was down 38-1/2 at $12.44. Kansas City hard red winter May futures ended 36-3/4 cents down at $12.91-1/2 per bushel. Minneapolis May spring wheat futures settled 33-1/2 cents lower at $14.83-1/4.
Volume was on the lighter side in Chicago estimated at 74,912 futures and 22,013 options. Export activity on Thursday failed to generate any bullish momentum but traders also said that the overall pace of US wheat exports was enough to keep a firm undertone in the wheat market.
USDA on Thursday, in its weekly export sales report, said 423,100 tonnes of wheat were sold for export last week, below trade estimates for 500,000 to 650,000 tonnes. Japan on Thursday bought 142,000 tonnes of milling wheat in its regular weekly export tender, including 46,000 tonnes US hard red winter wheat. Record high wheat prices are leading to increased wheat acreage globally and, assuming normal weather, wheat output should be on the upswing.
A French analyst raised its forecast for EU soft wheat for 2008/09 by 200,000 tonnes to 128.6 million tonnes and England's wheat area climbed 10.4 percent to 1.9 million hectares, according to Britain's farm ministry. Traders are watching the March contract trade above all key moving averages and first support is at the 20 day moving average of $11.07 per bushel.

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