MGE wheat lower

Spring wheat futures at the Minneapolis Grain Exchange closed mostly lower on Thursday in a technical setback from recent advances, traders said. The market was also following profit-taking declines in Chicago Board of Trade wheat.
However, volume was light, and Minneapolis traders seemed reluctant to sell the market aggressively in light of recent fund-driven advances. MGE December wheat ended down 6-3/4 cents at $5.06-3/4 per bushel after finding support at $5.03, near its 20-day moving average. Funds were small net sellers, traders said. J.P. Morgan sold 300 December contracts while UBS Warburg sold 200 March. The December/March spread widened, trading at a carry of 15-3/4 to 16 cents, reflecting easier cash markets, traders said.
Volume was estimated by the Minneapolis exchange at 3,625 contracts, down from 4,318 on Wednesday. Concerns about tightening world wheat supplies helped underpin the market. The London-based International Grains Council on Thursday cut its forecast for 2006/07 world wheat production to 585.2 million tonnes, down 2.4 million from a previous estimate of 587.6 million. The IGC pegged Australia's wheat crop at 10.0 million tonnes, down from last month's estimate of 16.0 million. However, the IGC also said world wheat area was forecast to rise by 4 percent in 2007 to total about 215 million hectares, a factor that pressured deferred wheat futures. Wheat futures were pressured by news that India has no plans to issue fresh wheat tenders. A top food ministry official said India is confident it can build stocks of at least 4 million tonnes by April 1, 2007.
Earlier this year India was forced to import wheat for the first time in six years after a crop shortfall. The US Department of Agriculture's weekly export sales figure for wheat was market-neutral at 460,800 tonnes, within the range of estimates for 300,000 to 500,000 tonnes. After the market closed, Egypt's main government wheat buyer said he was seeking 55,000-60,000 tonnes of US, French, Australian, Canadian or German wheat for December shipment. Tender results were expected on Friday.
Also, the US CCC said it was seeking 70,270 tonnes of hard red winter wheat for Ethiopia. Private forecaster Meteorlogix said rainfall is needed in Australia to avoid further deterioration of the wheat crop. There was a chance for some rain in West Australia's wheat belt during the next seven to eight days.