MGE spring wheat higher

Spring wheat futures on the Minneapolis Grain Exchange closed higher on Thursday on bullish export news and slipover strength from the Kansas City wheat market, traders said. The market got an early lift after the US Department of Agriculture reported exports sales of US wheat for last week at 1,183,400 tonnes, well above trade estimates for 700,000 to 800,000.
"The export sales helped us more than anything," one Minneapolis trader said. USA's July supply/demand report was a mixed bag, but the US production estimates helped Kansas City wheat gain against Chicago. In Minneapolis, September spring wheat settled up 4 cents at $6.32 per bushel, with December up 5 at $6.40 and back months unchanged to up 7 cents.
Volume was estimated by the exchange at 4,716 contracts. Spot July, which is in delivery, rose 18 cents to close at $6.37. There were 15 redeliveries on the contract for Thursday, all issued by a Cliff Larson Co customer. A Fimat USA customer stopped the wheat. Inter-market wheat spreads adjusted after the USDA updated its US wheat production estimates by class.
The government cut its crop estimate for hard red winter wheat, the type traded at the Kansas City Board of Trade, and raised its production forecast for soft red winter wheat, which is traded in Chicago. As a result, Kansas City wheat gained on Chicago.
USA's spring wheat estimate was viewed as neutral. The government pegged 2007 "other spring" wheat production at 498 million bushels, near the average trade estimate of 495 million.
On the world balance sheet, USDA raised its estimate of global wheat ending stocks for 2007/08 by 4.5 million tonnes, to 116.55 million, after raising production forecasts for China and Australia. Still, the world wheat carryout would be the lowest in 26 years. Along with the bullish export sales report, news of additional export demand added strength. A subsidiary of Bungle Ltd in Brazil, Bungle Aliments, said it planned to make additional imports of North American wheat this year.
And European and US traders said Iraq might have made a major new purchase of Canadian hard wheat and US. Details were unclear, but traders have been told that about 100,000 tonnes of US hard wheat has been purchased, along with about 100,000 tonnes of Canadian hard wheat. In routine business, Japan bought 100,000 tonnes of Canadian Australian and US wheat at its regular weekly tender.