CBOT wheat futures higher

Wheat futures on the Chicago Board of Trade roared to across-the-board contract highs on Tuesday, lifted by world wheat production issues and spill-over from a surging soyaoil market, traders said. CBOT soyaoil hit a 23-year high amid strong Asian vegoils markets.
Concerns about drought in Ukraine and other parts of Europe's breadbasket attracted speculative buying in wheat and lifted French wheat futures to contract highs as well. Romania said it expects to harvest 2.9 million tonnes of wheat in 2007, down 46 percent from last year due to drought.
Signs of deterioration in the US winter wheat crop added support. The US Department of Agriculture said late Monday 53 percent of the US crop was rated in good to excellent condition, down from 57 percent the previous week. "You've got the (US) condition reports from yesterday, and you've got the weather in Ukraine drying out again. That got people's attention," said Roy Huckabay, a commodities analyst with the Linn Group in Chicago.
CBOT July wheat settled up 7 cents at $5.27-1/4 per bushel, after reaching $5.36, above its previous contract high of $5.33-3/4. Deferred months ended up 5 to 10 cents, with December up 8 cents at $5.54-1/2.
Commodity funds bought 5,000 contracts, traders said. Volume was heavy, estimated by the CBOT at 100,559 wheat futures and 19,190 options. On the export front, Morocco tendered to import 298,636 tonnes of soft wheat. CBOT traders shrugged off a bearish US wheat production estimate from Memphis-based consulting firm Informa Economics. Informa pegged the US 2007 winter wheat crop at 1.686 billion bushels, trade sources said, above USDA's latest estimate of 1.62 billion.
Broken down by class, Informa forecast the US hard red winter wheat crop at 1.095 billion bushels, soft red winter wheat at 353 million bushels and winter white wheat at 238 million bushels.
USDA will update its US winter wheat estimates on June 11. Harvest conditions in the US Plains hard red winter wheat belt were improving, with mostly dry weather forecast through Friday. But showers were expected to return this weekend, potentially causing more harvest delays and spreading disease.
"It still doesn't look like there are any major changes in the pattern that has provided this wet weather all spring," DTN Meteorlogix forecaster Mike Palmerino said.
USDA said in its weekly progress report the winter wheat harvest was 10 percent complete in Texas, lagging the five-year average of 26 percent. In Oklahoma the harvest was 3 percent complete, behind the five-year average of 23 percent.
On the bearish side, the US spring wheat crop was off to a strong start. USDA said 85 percent of the crop was rated good to excellent, up from 79 percent a week ago.
Also, CBOT wheat was looking technically overbought after a two-week climb. The nine-day relative strength index for July stood at 67 ahead of the open and closed at 70, reaching the 70-to-100 range that technical traders view as one sign of an overbought market.