MGE wheat falls

Spring wheat futures at the Minneapolis Grain Exchange closed lower on Wednesday as the market underwent a downward adjustment from the gains posted in the week, traders said.
MGE wheat closed 5-1/2 to 7 cents per bushel lower, with September down 7 at $4.47 per bushel. December was down 6-3/4 at $4.63. Wheat futures have been trending higher as global stocks of wheat decline and export sales of US wheat remain brisk. Wheat traders said those bullish fundamentals probably have been factored into the market, leaving prices vulnerable to a potential downward correction.
Traders and analysts predicted wheat prices would remain volatile, underpinned by dwindling global stocks and active exports. Weather problems in parts of Europe have boosted European values sharply, a scenario that is expected to generate increased exports into European countries.
Analysts in Paris said on Wednesday that European wheat prices would remain at 2-1/2-year highs as the world's major buyer's scramble for cover amid tight supplies, but increasing imports are likely to cap the rally.
Export activity overnight-included news that Japan this week would buy 111,000 tonnes of wheat, South Korea was seeking 22,600 tonnes and Taiwan sealed a deal to buy 49,510 tonnes of US wheat on Wednesday.
The export market also remained alive with talk of Indian imports of wheat. Iraq was still being mentioned as another buyer. India is eliminating its import duty on wheat to stimulate imports. Weather concerns remained important. Meteorlogix weather service said recent rains helped replenish soil moisture in the US Plains hard red winter wheat region, but more rain was needed. A drought this summer has drawn down the soil moisture levels in parts of the Plains, leading to concerns about the fate of the soon-to-be seeded 2007 US winter wheat crop.
Meteorlogix also said light rain has improved wheat prospects in west and south-east Australia, but the rest of the wheat region remained stressed by dryness.