spring wheat futures on the Minneapolis Grain Exchange closed higher on Wednesday on light commercial pricing and news of a sale of US wheat to Iraq, brokers said.
But trade was thin, leaving prices open to sharp moves, they said. MGE December wheat closed up 4-3/4 cents at $3.74 per bushel but stayed within the range established in the past week, meeting resistance at $3.74.
Deferred months-closed up 4-1/2 cents to down 1/2. Volume was estimated by the exchange at 4,996 contracts, up from 3,976 on Tuesday. Commercials bought to cover recent routine export business, traders said.
The day's big export story involved Iraq. A senior Iraqi trade official on Wednesday said Iraq bought a total of 1 million tonnes of US wheat from Columbia Grain and Louis Dyer's at $190 per tonne FOB.
Because Iraq typically buys hard red winter wheat, the type traded in Kansas City, the news boosted nearby KCBT wheat futures. KCBT December wheat closed up 2-1/2 cents at $3.72-3/4 per bushel.
Wheat traders had awaited confirmation of the Iraq purchase since an announcement on October 9 that a deal was in the works.
With the purchase finalised, futures could be poised for a letdown.
"With that behind us, I would think that we'll go down. It's been in the market for two to three weeks," one MGE trader said.
Wheat had some lingering support from USDA's crop progress reports on Monday, which showed the US winter wheat conditions well below the ratings of a year ago.
However, the Meteorlogix weather service said current soil moisture and temperatures mostly favoured the developing hard red winter wheat crop in the central US Plains.
There was bearish news from Australia, where monopoly exporter AWB Ltd raised its forecast of Australia's 2005/06-wheat crop by nearly 10 percent to a near-record level of 23 million to 25 million tonnes. The crop was boosted by good spring weather, AWB said.
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