Nearby wheat futures on the Chicago Board of Trade settled up the daily trading limit of 30 cents a bushel on Monday, rocketing higher on Australian crop worries and heavy spread trade, traders said.
Front months gained on deferreds as traders exited bear spreads in a continuation of last week's theme. Talk of more reductions in the Australian wheat crop prompted speculative buying in new-crop months, while ideas of increased wheat acreage for 2007/08 weighed on deferreds.
"Wheat is trading a 10 million (tonne) Australian wheat crop, and that's a big drop," Fimat USA analyst Dan Cekander said. CBOT December wheat closed up 30 cents, or 6.5 percent, at $4.94 per bushel, above its previous contract high of $4.87 and the highest spot wheat price in 10 years.
On the electronic platform, December wheat briefly moved above the 30-cent limit, rising 33-1/4 cents to $4.97-1/4. The CBOT suspended electronic trade of wheat futures at midmorning after December traded above the limit.
March 2007 and May 2007 settled up 30 cents, while deferred months closed up 17 to down 1 cent. Funds bought about 5,000 contracts early in the session before prices locked at the limit levels, traders said. The synthetic bid for December wheat, based on moves in wheat options, was at $5.28, with offers at $5.32 - signalling another limit-up move when the markets open Monday night for the overnight session.
Unfilled buy orders totalled 1,000 each in December and March, traders said.
Volume was estimated by the CBOT at 76,946 wheat futures and 28,117 options. Export activity early Monday featured Tunisia tendering to buy 100,000 tonnes of milling wheat and Algeria tendering to buy 50,000 tonnes of wheat.
Also bullish was news that Ukraine on Monday proposed new grain export quotas to guard against shortages. Ukraine's Agriculture Ministry lowered its 2006 grain harvest forecast to 34.7 million tonnes from a previous figure of 37.16 million.
Meanwhile, Russian customs data showed Russian wheat exports outside the Commonwealth of Independent States (CIS) fell 10.7 percent in January-August from the same period last year. Wheat imports from outside the CIS rose to 9,600 tonnes in January-August from 3,000 tonnes a year earlier. French wheat futures hit a fresh 2-1/2 year high on Monday on mounting concerns about world wheat supplies.
Friday's CFTC Commitments of Traders report showed large speculators shifted to a net long position for CBOT wheat futures and combined futures/options in the week ended October 3. The December contract remained in overbought technical territory. The nine-day relative strength index stood at 76 ahead of the open, rising to 84 by the close.
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