CBoT wheat futures higher

Wheat futures on the Chicago Board of Trade closed higher on Thursday, roaring to a new 11-year top on a huge weekly US export sales figure and surging European wheat markets, traders said.
CBoT wheat got off to a strong start after the US Department of Agriculture reported export sales of US wheat for last week at nearly 2.1 million tonnes, well above trade estimates for 950,000 to 1.1 million - and the largest weekly total since 1996.
"It's the export number. It's the continued decline in world wheat production. It's the wet weather in Europe and the dryness in the (US) Northern Plains and Canada," said analyst Dan Basse, president of Chicago-based AgResource Co.
"We can't afford to lose any more bushels. That's what the wheat market is all about," he added. Front-month September wheat briefly rose the daily trading limit of 30 cents a bushel, hitting $6.64, the highest spot wheat price since 1996. The market retreated a bit as traders took profits, but September still ended up 17 cents on the day at $6.51. December closed 16-1/2 cents higher at $6.69 and back months were up 1 to 14-1/2.
Funds bought 4,000 contracts, traders said. Trading in the wheat/corn spread remained volatile. Volume was heavy, estimated by the CBoT at 142,993 wheat futures and 9,122 options. Concerns about the European crop were supportive. In Paris, French milling wheat futures soared to historic highs as anxiety over global and French supplies prompted speculative buying.
French agency ONIGC cut its estimate of the French soft wheat crop to less than 34 million tonnes, from its previous forecast of 35 million. There was fresh export business as well, with the USDA in its daily reporting system confirming a sale of 100,000 tonnes of US hard red winter wheat to Algeria. Also, South Korean millers were seeking a total of 42,200 tonnes of US wheat, and Taiwan set a tender for Friday to buy 103,220 tonnes of US wheat.
Extreme hot weather this week in the northern US Plains and Canadian Prairies threatened to cut spring wheat yields. But scouts on the Wheat Quality Council's US spring wheat tour continued to report better-than-average crop prospects.
After the close, the tour in its final report projected the average 2007 US spring wheat yield at 37.3 bushels per acre, up from the 2006 tour estimate of 31.7 and above the tour's five-year average of 35.1. The tour projected an average durum yield at 29.0 bushels per acre, up from 23.3 bushels last year and the five-year tour average of 27.3.
In other wheat news, the London-based International Grains Council pegged 2007/08 world wheat production at 614 million tonnes, unchanged from its June estimate and above last year's 591 million.