Spring wheat futures at the Minneapolis Grain Exchange closed higher on Monday following gains in the Chicago market and due to light hedge selling, traders said. "We're just following the outside markets, Chicago and Kansas City, and there were only a few light hedges," a trader said.
US farmers are harvesting the 2006 spring wheat crop in the key growing region of North Dakota, a scenario that sometimes leads to heavier hedge pressure. "We're hearing yields better than expected," the trader said.
MGE wheat closed 4-1/2 to 8 cents per bushel higher, with September up 8 at $4.86 per bushel. "I guess there are rumours China and India might be buying wheat, so that may be a little supportive," the trader said.
A drawdown in global wheat output this season has been supporting the wheat market, and export news over the weekend may have given wheat bulls some additional fodder.
US Wheat Associates market analyst Joseph K. Sowers said on Monday that China was expected to import 1 million tonnes of milling wheat by the end of June 2007 and export 2 million tonnes of feed wheat. Sowers also told Reuters on the sidelines of a grains conference in Hanoi that India was struggling to rein in rising prices and would import 4 million tonnes.
Export sources said Taiwan will tender for 96,340 tonnes of US wheat on Tuesday, while Israel was tendering for 20,000 tonnes of feed wheat from Europe. USDA early Monday said 11.8 million bushels of wheat were inspected for export last week, below estimates for 12.0 million to 17.0 million bushels.
Weather was moving to the background as a market factor for US wheat futures because the winter crops have been harvested and the US spring wheat crop is currently being harvested.
Meteorlogix weather on Monday said hot and dry weather in the US northern Plains would aid spring wheat harvest but harm corn and soybeans. Friday's CFTC commitments of traders report for futures and options combined showed that as of last Tuesday, large speculators were long 12,652 lots, down 504 from the previous week and short 776 lots, up 208.
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