Spring wheat futures on the Minneapolis Grain Exchange settled higher on Friday, following as the Chicago and Kansas City markets rose on export optimism amid tight world supplies, traders said.
Concerns about the size of Canada's wheat crop gave the market lift, after the Canadian Wheat Board lowered its all-wheat production estimate for Western Canada.
The CWB on Thursday pegged the 2007 crop at 20.0 million tonnes, down from 21.2 million in June and down 16 percent from last year. Hot weather has been threatening the spring wheat crop in the Canadian Prairies. European wheat markets were higher as well, buoyed by harvest delays in France and strong domestic cash markets.
Minneapolis September spring wheat closed 6-3/4 cents higher at $6.43-1/2 per bushel, with December up 4-1/2 at $6.55-1/4. Back months were up 2-1/4 to down 5 cents. UBS Warburg was a late seller while Country Hedging was a scale-down buyer toward the closing bell, traders said.
Volume was light, estimated by the exchange at 3,781 contracts and 620 cash exchanges. Harvest pressure limited the rally. The northern US Plains spring wheat harvest was in its phase, but traders noted talk of strong yields of 45 to 60 bushels per acre.
A spring wheat crop estimate from analytical firm Informal Economics was viewed as bearish. The firm on Friday projected US production of other spring wheat at 519 million bushels, above the US Agriculture Department's forecast for 498 million. Informal forecast US all-wheat production at 2.154 billion bushels, above USA's July estimate of 2.138 billion.
USDA will release updated production estimates August 10. In export news, Pakistan has no plans to resume exports of wheat, its commerce secretary said. Pakistan suspended wheat exports in May to stem a surge in domestic prices, five months after a ban was lifted.
Taiwan will permit small amounts of pesticide residue in wheat imports, health authorities said, ending a zero-tolerance policy and easing concerns about a flour shortage after cargoes last month faced rejection.
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