Wheat futures at the Chicago Board of Trade closed sharply higher on Thursday, rallying from recent declines on bullish export news, including sales of US wheat to Iraq and Egypt, traders said. "The world consumer has absolutely no coverage, and he has all of a sudden found out that we've got the tightest carry-over since (1977)," Fortis Clearing Americas analyst Charlie Sernatinger said.
Wheat prices were also due for a bounce following a steep retreat on profit-taking from the multiyear highs hit late last week. CBoT September wheat settled up 21 cents, or 3.6 percent, at $6.04 per bushel, breaking through resistance at its 20-day moving average of $5.95-3/4. December rose 19 cents at $6.16 and back months ended up 10 to 21 cents.
Spot July, which is in delivery, rose 19-1/2 cents to close at $5.91. Funds bought 3,000 contracts, traders said. Volume was estimated by the CBoT at 62,269 wheat futures and 13,685 options. The market received an early boost after the US Department of Agriculture said private exporters reported the sale of 100,000 tonnes of US hard red winter wheat to Iraq for 2007/08.
"They are down to fumes on their stocks," Sernatinger said, referring to Iraq. Egypt on Wednesday bought 175,000 tonnes of wheat, including 115,000 tonnes of US soft red winter wheat. Jordan issued tenders to buy 100,000 tonnes of hard wheat and 150,000 tonnes of barley, European traders said.
Meanwhile, Syria's state grain agency told customers it may have to cancel export contracts for up to 550,000 tonnes of soft wheat and 200,000 to 300,000 tonnes of durum because of a poor harvest, European traders said Wednesday.
Production worries remained supportive as rain-related harvest delays continued in the southern US Plains, including south-east Kansas, Oklahoma and northern Texas.
"There's some chance of improvement for harvest conditions in the south in the five-day period but I'm not sure that's going to continue into the six-to-10-day period," DTN Meteorlogix forecaster Joel Burgio said.
Wet weather in Europe has eased drought concerns, but heat in the south and rain in the west have raised worries about the upcoming grain harvest, analysts in London said. French crops office ONIGC put France's soft wheat output in 2007/08 at 35 million tonnes, up 5 percent from last year. But the agency said European Union wheat exports would drop to 8.5 million to 9.5 million tonnes, from 10.7 million in 2006/07.
On a bearish note, India's wheat output this year will not fall below 73.7 million tonnes, which may reduce import needs, a farm official in New Delhi said. India received seven bids for a 1 million-tonne wheat import tender at prices between $320 and $360 per tonne, levels at which traders said the government was unlikely to buy large quantities.
Deliveries on the CBoT July contract were light at 20 lots. A Banc of America customer was the main stopper of 15. Cash basis bids for soft red winter wheat were steady to firm in the US Midwest, dealers said.
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