Wheat futures at the Chicago Board of Trade closed lower on Friday on a setback after a recent wave of buying by managed funds boosted the market to 9-1/2 month highs, traders said. CBOT wheat closed 3 to 10 cents per bushel lower. May was down 10 at $3.56-1/2. Funds were net sellers of 1,500 lots on Friday and a lot of the selling pressure on wheat stemmed from the sharp declines in soybeans.
Pit sources said volatile dealings potentially could persist if investment funds continue to buy CBOT grain and soy futures. The fund buying near Thursday's close totalled a huge 8,000 lots.
Volume in wheat was estimated by the exchange at 26,101 futures and 2,199 options, down from the 51,759 futures traded on Thursday.
Although the recent pattern of fund buying failed to surface on Friday, traders and analysts remained wary.
"Anybody who's said that it's finally over has been wrong many times recently," said Charlie Sernatinger, analyst for Chicago trade house O'Connor and Co "My feeling is there may be more fund buying to come because the end of the quarter is coming up and they often buy about then."
CBOT wheat had surged to 9-1/2 month highs amid the near relentless fund buying.
Wheat futures traders also cited the weakness in overnight Asian markets, sliding on fears that Beijing may raise interest for the first time since October. That would likely slow the buying power of Chinese importers.
The US dollar also was stronger on Friday, making US grains more expensive to importers.
Export action overnight was bearish for CBOT wheat futures and featured South Korea's purchase of 102,500 tonnes of Canadian feed wheat.
French wheat futures slipped to their lowest level in almost two months on Friday on news the European Union had granted an export subsidy of 8.94 euros ($12) a tonne on 74,000 tonnes, below trade expectations.
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