Hard red winter wheat futures on the Kansas City Board of Trade closed higher on Thursday, gaining against the Chicago wheat market on inter-market spreads, traders said.
The catalyst was the US Department of Agriculture's July supply/demand report, which lowered US hard red winter wheat production to 964 million bushels, below the average trade estimate for 995 million and down from the 1.032 billion that had been projected last month.
"Hard wheat is below what people thought it would be. I think it's going to continue to come down," said Roy Huckabay, an analyst with the Linn Group in Chicago.
USDA also raised its production forecast for soft red winter wheat, which is traded in Chicago, to 364 million bushels, above the consensus trade estimate of 352 million. USDA put US all-wheat production at 2.138 billion bushels, below the average analyst estimate of 2.156 billion. KCBT September wheat closed up 7 cents at $6.11 per bushel, with back months up 11 to down 3 cents.
Spot July, which is in delivery, rose 8 cents to settle at $6.21. There were no deliveries on the July for Thursday. Volume was estimated by the exchange at 23,729 contracts. Weekly export data was supportive as well. USDA on Thursday reported export sales of US wheat last week at 1,183,400 tonnes, well above trade estimates for 700,000 to 800,000.
Signs of fresh demand added support. A subsidiary of Bunge Ltd in Brazil, Bunge Alimentos, said it planned to make additional imports of North American wheat this year. And European and US traders said Iraq may have made a major new purchase of US and Canadian hard wheat. 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.
Hedge-related selling hung over the market, taking KCBT futures off their session highs. FC Stone sold at least 1,000 September contracts, traders said. Hedge pressure has been a feature all week, reflecting harvest sales of HRW wheat in the country.
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