CBOT wheat settles lower in profit-taking setback

Wheat futures at the Chicago Board of Trade closed lower on Wednesday in a profit-taking setback after weather worries in the northern US Plains drove up prices earlier this week, traders said.
"We've traded all the hot and dry weather that we can, and now we're done," one CBOT floor trader said. Traders also cited some updated midday forecasts calling for a bit more moisture in the northern Plains.
Dry conditions in the region have been stressing the spring wheat crop, a factor that boosted wheat futures in recent days. Spring wheat prospects have become a critical concern for the market because drought has cut the size of the hard red winter wheat crop, tightening US wheat supplies.
CBOT July wheat ended down 6-1/4 cents at $3.72 a bushel, with September down 6-1/2 at $3.88 and December down 6-1/2 at $4.07-3/4. September broke through support at its 100-day moving average of $3.91.
Funds were net sellers of 2,000 contracts. Late in the session, FC Stone sold 500 March contracts and Fimat USA sold 400 September, traders said. Volume was on the light side, estimated by the exchange at 40,393 futures and 4,297 options. That compared with 58,903 futures on Tuesday. Kansas City July wheat ended down 2-3/4 cents at $4.90-3/4. In Minneapolis, new-crop December spring wheat was down 3/4 cent at $4.88-3/4.
Traders noted some positioning ahead of the USDA's June plantings and quarterly grain stocks reports on Friday. Traders expect the USDA to raise its spring wheat acreage estimate from its March 31 projection of 13.9 million acres. The average spring wheat seedings estimate among analysts surveyed by Reuters was 14.5 million acres. No significant harvest delays were expected in the southern Plains winter wheat belt.
In export news, India finalised a deal to import 2.2 million tonnes of wheat from five international bidders, and Indian wheat futures eased amid the news. Export traders speculated that the wheat would probably be soft wheat from France or the Black Sea region. The Indian government also cut the import duty on wheat to 5 percent from the current 50 percent to control inflation.
Agriculture Canada forecast Canada's wheat production excluding durum at 22.5 million tonnes, up 8 percent from 2005, because of larger harvested area offset by lower yields.