MGE wheat tumbles on technicals

Spring wheat futures at the Minneapolis Grain Exchange tumbled on Thursday in a technical breakdown from contract highs this week as some moisture fell on the parched northern US Plains, traders said.
Traders also noted floor talk that the Canadian Wheat Board was selling futures.
The benchmark September spring wheat contract briefly fell the 30-cent daily trading limit but staged a quick rebound.
MGE September settled down 17-3/4 cents at $5.06-1/4 per bushel after dipping 30 cents, to $4.94. Deferred months ended down 5 to 22 cents. Volume was estimated by the exchange at 10,691 contracts, down from 11,907 on Wednesday.
Spot July, which expires on Friday, settled down the 30-cent limit at $5.08. Open interest in the contract after Wednesday was down to a single contract.
Selling was broad-based, with Man Financial and ADM Investor Services among the day's featured sellers, traders said. UBS Warburg was a late seller.
The market was seen as technically overbought after drought worries lifted futures to contract highs this week, with front-month July reaching the highest MGE spot price in 10 years.
News of showers overnight in the northern Plains sparked long liquidation from the opening bell. "We squeezed a lot of the weak players out of their positions here today," Prudential Financial grains analyst Shawn McCambridge said. "In Minneapolis since the middle of June, we've put nearly $1 onto prices. People just said, 'We're not going to get another dollar out of it in the next 30 days, so I'm going to take some money out today.'"
Rumors that the United States had imported a large amount of Canadian wheat were bearish as well. "The rumors are 1 million tonnes of spring wheat and a little bit of durum," said Roy Huckabay, grains analyst with The Linn Group. "That is a huge trade. It's not just a couple of trains."
Another trader said there were expectations for increased wheat imports into the United States from Canada following the elimination of import tariffs earlier this year.
Overnight export news featured Japan buying 80,000 tonnes of wheat, including 60,000 tonnes of US origin, while Asian buyers were eyeing new-crop Black Sea wheat. Private group Australian Crop Forecasters cut its forecast for Australia's 2006/07 wheat crop by 25 percent, to 18 million tonnes, because of dry conditions.