MGE wheat lower on liquidation

Spring wheat futures at the Minneapolis Grain Exchange declined on Monday as funds took profits by liquidating long positions after advances late last week, traders said. Some floor talk of better-than-expected yields in the early US spring wheat harvest and in Europe added pressure.
Minneapolis Grain Exchange September spring wheat settled down 5-3/4 cents at $4.98-1/4 per bushel, with deferred months down 2-1/2 to 6-1/4 cents. Funds sold 600 to 800 contracts, traders said. ADM Investor Services sold 600 September and 300 December, while Man Financial bought 200 September and 200 December.
Volume was estimated by the exchange at 5,985 contracts, down from 9,535 contracts on Friday. Funds have been heavily net long in MGE wheat for several months, leaving the market open to long liquidation.
The latest CFTC Commitments of Traders report showed funds cut their net long position as of July 18, but were still heavily weighted to the long side.
Also, the drought worries that have supported wheat prices in recent weeks were fading as the US spring wheat crop neared maturity and the early harvest expanded amid hot and dry conditions.
"At this point, you're reaching the limit in terms of how much damage you can do as the crop matures at a rapid pace," Meteorlogix forecaster Mike Palmerino said.
Crop scouts on the Wheat Quality Council's US spring wheat tour will assess the crop this week, with a production estimate expected on Thursday. After the markets closed, the USDA said the spring wheat crop in North Dakota, the top US spring wheat state, was 5 percent harvested as of Sunday, at least a week ahead of average.
Wheat futures also fell in Europe on Monday, retreating from last week's contract highs as market talk of better European yields prompted profit taking. Meanwhile, Spain cut its forecast of this year's wheat crop to 5.6 million tonnes, down from a previous estimate of 6.2 million, due to hot weather.
Weekly export inspections data was bullish. The USDA said 17.6 million bushels of US wheat were inspected for export last week, above a range of trade estimates for 12 million-16 million. In export news, Jordan tendered to buy 50,000 tonnes of wheat, while South Korea passed on a tender for 52,500 tonnes of feed wheat.