02102016Wed
Last update: Wed, 10 Feb 2016 07am

CBOT wheat futures higher on bargain buying

Chicago Board of Trade wheat futures rose on Monday on bargain buying after last week's 4.8 percent sell-off, coupled with fears of freeze damage due to bitter cold in the US Midwest, traders said. The arctic blast this week will put a third of the region's dormant soft red winter wheat crop at risk of damage, agricultural meteorologists said. CBOT March wheat encountered chart resistance at its 30-day moving average of $5.98, while support was noted at the 50-day average of $5.76.

News that China bought two 60,000-tonne cargoes of hard wheat lent support. The origin was unclear but the purchase may include some Australian and US wheat, traders said. China is scheduled to hold a special state grain auction this week that will decide which companies get import quotas for 2015. The auction will include 2 million tonnes of wheat as well as 5 million tonnes of corn from state reserves.

Gains limited by strong competition for wheat export business. Algeria's state grain agency bought at least 450,000 tonnes of optional-origin milling wheat at a tender, European traders said. The wheat is expected to be sourced from the European Union. The US dollar index hit a nine-year high, making US wheat less attractive on the world market, as the euro tumbled on fears of a possible Greek exit from the euro zone.

Copyright Reuters, 2015