Hard red spring wheat futures on the Minneapolis Grain Exchange closed higher on Wednesday, buoyed by strength in Chicago wheat as traders positioned ahead of key data due on Friday from the US Department of Agriculture, traders said. May spring wheat settle up 3-1/4 cents at $4.99 per bushel, with July up 2-1/2 at $5.06-1/4 and new-crop December up 4-1/4 at $5.20.
Volume was estimated by the exchange at 4,645 contracts, down from 6,024 on Tuesday. December was supported by inter-market spreading, with some firms buying Minneapolis December and selling the same month in the Chicago and Kansas City markets.
Others were taking profits by unwinding the spread. Traders said the activity could signal expectations for bullish data for spring wheat on Friday when USDA releases its 2007 planting intentions report. The trade expects a drop in spring wheat acreage for 2007 due to competition from corn and soyabeans.
The average estimate for US spring wheat plantings among analysts surveyed by Reuters was for 13.588 million acres, down from 14.899 million in 2006.
But guesses ranged widely, from 12.5 million to 14.4 million acres, and a larger-than-expected drop in seedlings would support new-crop contracts in Minneapolis.
The USDA will also release its quarterly grain stocks report on Friday. The average analyst estimate of March 1 US wheat stocks was 881 million bushels, compared with 1.315 billion on December 1 and 972 million a year ago. Strength in the crude oil market was supportive for the broader commodities sector. Increased tensions between Iran and the West lifted United States.
Crude prices above $64 a barrel, and the Reuters/Jefferies CRB Index of 19 commodity futures reached a four-week high at 316.23. In wheat export news, South Korea bought 20,400 tonnes of US wheat, but it passed on a tender to buy another 20,000 tonnes due to high prices. Taiwan millers will seek US wheat on Friday.
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