US wheat futures closed lower on Friday on technical weakness and expectations of a rebound in global wheat output for 2008, traders said. Spillover weakness from soyabeans added pressure. Wheat joined a broad sell-off in commodities as large funds liquidated holdings in most grains, energies and metals near the end of the month and quarter.
Chicago Board of Trade May soft red winter wheat finished 25 cents lower at $9.89 per bushel after falling to $9.67-3/4, its lowest point since February 4. New-crop July closed down 21-1/2 at $9.96. Funds sold 2,000 lots. The CBOT May/July spread widened, trading out to a 7-cent carry (premium July), from 3 cents on Thursday.
The spread showed an inverse of over $1 (premium May) a month ago. May's decline relative to new-crop July reflects easing concerns about tight old-crop supplies, traders said.
Kansas City Board of Trade May hard red winter wheat fell 32-3/4 cents to settle at $10.22-1/4, with new-crop July down 28-1/4 at $10.26-1/4. Minneapolis Grain Exchange May spring wheat closed down 26-3/4 cents at $12.54, with new-crop September down 40 cents at $10.40. Positioning noted ahead of Monday's USDA prospective plantings and quarterly stocks reports.
Trade expects USDA to show 2008 US all-wheat plantings at 63.628 million acres, up 5 percent from 2007, and wheat stocks 666 million bushels. Rains in eastern Australian grain belt boost hopes for record wheat crop. European Union to harvest 283.86 million tonnes of cereals this year, up from 254.30 million in 2007, EU grain lobby Coceral said. Soft wheat production projected at 128.61 million tonnes, up from 111.72 million.
International Grains Council keeps its forecast for 2008/09 world wheat production at a record 646 million tonnes, unchanged from last month. Taiwan to tender for 40,000 tonnes of US wheat next week. Goldman Sachs estimates 2008 US all wheat acreage 64.8 million, winter 46.6 million, spring wheat 15.7 million.
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