CBoT wheat futures up

Soft red winter wheat futures at the Chicago Board of Trade soared 3 percent on Tuesday on a big drop in Canadian wheat plantings and on declining US spring and winter wheat ratings, traders said.
Statistics Canada surprised the market by reporting 2007 Canadian all-wheat plantings at 21.7 million acres, the smallest area since 1970. The figure was well below the average trade estimate of 23.4 million and Statscan's March estimate of 23.8 million.
"That was below what people were looking for by a substantial amount. I think it just added to the sense that we are going to really struggle to have enough to go around this year," Iowa Grain analyst Gavin Maguire said.
The estimate follows a June 11 US Department of Agriculture forecast for world wheat stocks to drop to 30-year lows by the end of the 2007/08 marketing year.
CBoT July wheat closed up 19 cents, or 3.2 percent, at $6.08-1/2 per bushel. The contract reached a session high of $6.18-1/2, approaching the 11-year-high spot price set earlier this month at $6.19-1/4. Most-active September ended up 21-1/2 cents at $6.26, with December up 19-1/4 at $6.34. December, March and May hit contract highs.
Funds bought 4,000 contracts, traders said. Volume was heavy at an estimated 103,005 wheat futures and 18,298 options. Also bullish was news that India issued a tender to import 1 million tonnes of wheat. CBoT traders said the United States was not likely to get any of the business, but the tender would act as a further draw on global supplies.
There was also word of unwanted rain spreading across France, heightening worries about the quality of Western European wheat and barley harvests. In Ukraine, consulting firm UkrAgroConsult lowered its 2007 wheat harvest outlook to 15 million tonnes, from 17.698 million. The figure compares to USDA's June estimate of 14 million.
Demand for high-protein wheat amid concerns about the US winter wheat harvest continued to lift MGE July spring wheat against the Chicago market. MGE July ended up 20 cents at $6.20 after reaching $6.30, up the 30-cent daily trading limit and the highest spot price for spring wheat in 11 years.
USDA's weekly crop progress report late Monday showed a deterioration in US spring wheat ratings. USDA said 79 percent of the crop was rated in good to excellent condition, down from 85 percent a week earlier. Winter wheat ratings also declined, with 48 percent rated good to excellent, down from 50 percent the previous week.
The US winter wheat harvest was 22 percent complete, up from 11 percent the previous week but lagging the five-year average of 36 percent. In Illinois, a top soft red winter wheat state, the crop was 73 percent cut, ahead of the state's five-year average of 53 percent.
Despite the sharp run-up in futures, fresh export demand emerged after the close. Egypt said it was seeking 55,000 to 60,000 tonnes of US, French, Australian, German, Argentine and/or Kazakhstan wheat for shipment July 21-31. Tender results were expected on Wednesday and could shape opening calls for CBoT wheat futures.