US Wheat Review: Shakes Off Losses To End Up In Late Rally

 
   By Tom Polansek 
   Of DOW JONES NEWSWIRES 
 

CHICAGO (Dow Jones)--Technical buying and spillover support from other markets helped boost U.S. wheat futures late Monday.

Chicago Board of Trade March wheat jumped 5 3/4 cents to $6.16 3/4 per bushel. Kansas City Board of Trade March wheat rose 8 3/4 cents to $6.42 1/4, and Minneapolis Grain Exchange March wheat gained 2 cents to $6.57 1/4.

Light short covering helped support the markets ahead of the close, traders said. CBOT wheat has closed higher for the past three day sessions following late rallies in thin volume.

Before the rally, wheat was lower for much of the session as gains in the U.S. dollar put a spotlight on sluggish export demand, said Shawn McCambridge, analyst for Prudential Bache. A strong dollar makes U.S. grains less attractive to foreign buyers.

Traders are waiting to see the results of a tender from Saudi Arabia and whether new tenders surface now that the new year has begun, McCambridge said. The U.S. has faced stiff competition for export business lately, particularly from exporters in the Black Sea region.

There was a lack of fresh news for the markets to feed on Monday, traders said. Gains in crude oil and CBOT soybeans helped provide underlying support, they said.

"The lack of strong fundamental direction is really kind of leaving wheat to follow the general direction of the other markets," McCambridge said.

CBOT March wheat could find some technical support now that it has closed above its recent open outcry high of $6.15, a trader said. The contract's open outcry session high was $6.18 1/2.

 
 
   Kansas City Board of Trade 

Wheat continues to look toward other markets for direction, a KCBT floor trader said. Prices fell at the opening of trading but trimmed losses as crude oil traded higher and soybeans recovered, he said.

"We really just kind of sat around and followed everybody," the KCBT trader said.

It seems to be "kind of a pattern" for wheat to rise at the close and settle near its highs, a KCBT trader said. The open outcry session high for KCBT March wheat was $6.56, and the session low was $6.19 1/2.

"All the gains got strong on the close again," the trader said. "This seems to be kind of a pattern. Generally, the last week or two, it seems like they come in on the close and buy it up so we can settle on the highs."

There was light farmer selling, traders said.

 
 
   Minneapolis Grain Exchange 

MGE March wheat closed just below its session high of $6.58 and well above its session low of $6.44 1/2. The wheat markets are "still kind of in an uptrend" on technical charts after rallying since Dec. 5, a trader said.

Strength in crude oil and CBOT soybeans lent support to wheat, a trader said. The firm dollar weighed on prices earlier in the session, he said.

Weekly U.S. wheat export inspections of 10.595 million bushels were within trade expectations. Analysts had predicted inspections for the week ended Jan. 1 would be 4 million to 12 million tons.

-By Tom Polansek, Dow Jones Newswires; 312-341-5780; tom.polansek@dowjones.com

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(END) Dow Jones Newswires

January 05, 2009 15:35 ET (20:35 GMT)


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