Spring wheat futures on the Minneapolis Grain Exchange closed higher on Wednesday, as a rally in crude oil prices triggered speculative buying in Chicago Board of Trade grains, traders said. Inter-market wheat spreads added support, with firms buying Minneapolis July wheat against the same month in Kansas City.
But trade remained light overall, with volume in Minneapolis estimated at 3,388 lots. MGE March spring wheat closed up 6 cents at $5.03 per bushel, with May up 5 at $5.13-1/2 and new-crop December up 3-3/4 at $5.34-3/4.The May/July spread traded lightly at 8-1/2 cents.
There were 15 redeliveries on the MGE March contract. Strength in crude oil and gold set the tone for CBOT grains. US crude prices rose more than $1 a barrel after a surprise cut in US crude inventories and the Reuters/Jefferies CRB Index of 19 commodity futures rose 1.2 percent to close at 310.67.
News specific to wheat remained scarce, but expectations of a rebound in global wheat production for 2007/08 continue to hang over the market. India's farm minister estimated the country's wheat output 73.5 million tonnes, up 1 million from a previous estimate.
However, an official with US Wheat Associates, a US export marketing group, said India might have to import wheat for a second straight year to build up stocks, despite prospects for a bumper crop. The US Department of Agriculture was scheduled to release updated US and world supply/demand estimates for the harvested 2006/07 crop on Friday.
But analysts expected few changes for wheat. The average estimate among analysts surveyed by Reuters for US 2006/07 wheat ending stocks was 473 million bushels, nearly unchanged from USA's February figure of 472 million.
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