MGE wheat higher on technicals

Spring wheat futures on the Minneapolis Grain Exchange closed higher on Monday on a technical short-covering bounce after selling was exhausted, traders said. Strength in outside markets including Chicago wheat and corn added support, traders said.
MGE March spring wheat settled 3-1/4 cents higher at $5.02-1/4 per bushel, rebounding after dipping below its 100-day moving average of $4.98-1/2 and hitting $4.95-1/2, a two-month low. Deferred months-ended 3 to 10 cents higher. UBS Warburg bought 500 March contracts and was a noted buyer at the lows, while ADM Investor Services sold 500 March, traders said.
Volume was estimated by the Minneapolis exchange at 3,809 contracts, up from 3,607 on Friday. There were no deliveries on the spot December contract, which expires this week. CBOT March corn closed up 2-1/4 cents at $3.70-3/4 per bushel and March wheat was up 4-1/4 at $4.90. Traders noted inter-market spreading, with firms selling Minneapolis March wheat against CBOT March wheat. Traders also bought Minneapolis December 2007 wheat against the same month in Kansas City.
The US Department of Agriculture's December crop supply/demand reports came in near expectations and produced only a mild market reaction. The USDA raised its US all-wheat end stocks estimate to 438 million bushels, from 418 million in November, but within the range of trade estimates for 418 million to 456 million.
As expected, most of the increase was due to a 25-million-bushel drop in US wheat exports, to 900 million bushels. The USDA trimmed US spring wheat ending stocks to 118 million bushels, down 3 million, and raised hard red winter wheat stocks to 158 million bushels, up 33 million.
That helped Minneapolis spring wheat gain on Kansas City Board of Trade hard red winter wheat futures in the session. The USDA also raised its estimate of world wheat ending stocks to 120.7 million tonnes, from 118.8 million in November. In export news, Egypt bought 260,000 tonnes of wheat over the weekend, including 55,000 tonnes of US soft red winter and 60,000 tonnes of US soft white wheat.
But the fact that Egypt also bought from Argentina, France and Russia tempered the bullish nature of the purchase, underscoring strong export competition. The USDA reported weekly export inspections of US wheat at 18.3 million bushels, within a range of trade estimates for 15 million to 19 million.
The CFTC's Commitments of Traders report on Friday showed that large speculators expanded their net long position in MGE spring wheat futures in the week ended December 5.