MGE wheat settles mostly flat

Spring wheat futures at the Minneapolis Grain Exchange closed mostly unchanged on Wednesday as the market awaited key production estimates from the US Department of Agriculture on Friday, traders said.
Prices were also consolidating after rising to contract highs on Tuesday. MGE July spring wheat closed unchanged at $4.43-1/2 per bushel, with deferreds down 1 to up 2 cents. The spot may contract, which expires this week, settled unchanged at $4.48.
Prices tested both sides of unchanged, with commercial buying providing support. However, traders also noted commercial hedge selling at the highs. ADM Investor Services bought 200 July contracts and 300 September, while Country Hedging sold 200 July and 100 December.
Volume was estimated by the exchange at 3,506 contracts, down from 6,443 on Tuesday. Minneapolis futures gained ground against Kansas City wheat in inter-market spreads. Grain stocks figures issued by Statistics Canada were bearish.
Statesman reported Canadian all-wheat stocks as of March 31 at 18.8 million tonnes, up 22 percent from the previous year. Canadian durum stocks were at a record-high 5.2 million tonne. But wheat futures had fundamental support from concerns about the state of the US hard red winter wheat crop, with the USDA set to issue its first 2006/07 production forecasts on Friday.
Traders were expecting the USDA to show a drop in US 2006/07 all-wheat production. The average estimate for the US all-wheat crop among analysts surveyed by Reuters was 1.949 billion bushels, down from 2.105 billion in 2005/06.
The average estimate for the drought-hit HRW crop was 757 million bushels, down from 930 million in 2005/06. Forecasts for frost in the Plains were bullish. A cold spell expected in the northern HRW belt on Thursday and Friday might harm winter wheat plants that are still in the flowering phase of growth, a private forecaster said.
"It could damage the heading wheat crop in north-west Kansas, north-east Colorado and Southwest Nebraska," Meteorlogix forecaster Mike Palmerino said.
The market was awaiting news of wheat tenders from India and Iraq. India tendered for 3 million tonnes of wheat this week and the United States could get a share of the business, although Australia is seen as the likely main supplier.
Overnight business was quiet. Japan is seeking just over 100,000 tonnes of wheat in its regular on Thursday tender. Deliveries on the MGE May contract were light at 10 lots. A Fimat USA customer issued the wheat, and an ADM customer was the stopper.