CBOT wheat closes higher

Nearby wheat futures at the Chicago Board of Trade settled higher on Thursday, following as CBOT corn soared to the highest levels in a decade on concerns about US corn supplies, traders said. "We're riding the coattails of corn," one CBOT wheat trader said.
However, both markets closed well off the day's highs as speculators took profits. Concerns about export prospects for US wheat also weighed on values. CBOT December wheat settled up 4 cents, or 0.8 percent, at $4.91-1/2 a bushel after reaching $5.10. Sell-stops were hit as December dropped below $4.93. Deferred months ended up 2 cents to down 4-1/2. December corn settled up 11-1/4 cents at $3.44-3/4, after climbing to $3.53-1/2, the highest spot price for corn in 10 years.
Funds were even on the day in wheat, buying the market early and selling it late. Fimat USA was a noted seller of 1,000 wheat contracts into the close, traders said. Traders have started rolling December positions forward. Deutsche Bank spread 600 December 2007/December 2006.
Volume was estimated by the CBOT Thursday at 61,350 wheat futures and 10,420 options. The figures were down from Wednesday's official totals of 71,270 futures and 15,210 options.
As futures climbed, concerns about waning export demand for US wheat hung over the market. Prices remain relatively high, although CBOT December has fallen about 12 percent since reaching a multiyear peak in mid-October at $5.57.
Notably, regular buyer Japan on Thursday cancelled a planned purchase of 40,000 tonnes of US wheat and 20,000 tonnes from Australia due to high prices. Also, trade sources in Beijing said China likely would continue exporting feed wheat.
"We're starting to see the fundamental concerns about what this price level is doing to demand," Prudential Financial grains analyst Shawn McCambridge said.
"The concern is that we've done too good a job of price rationing, and maybe the current price level is too high."
The US Department of Agriculture reported export sales of US wheat last week at 938,800 tonnes, a marketing year high that was also above trade estimates for 450,000 to 650,000 tonnes. However, a sale of 400,000 tonnes of wheat to Iraq, which was announced last week, made up nearly half the total.
Private forecaster Meteorlogix said the US Plains winter wheat belt should stay mostly dry through the weekend, but storms on Monday to Wednesday should produce 0.3 to 1.5 inches of rain in southern Oklahoma and Texas. "The area that needs the moisture the most right now is Oklahoma. This should help them," Meteorlogix forecaster Mike Palmerino said.