Soft red winter wheat futures at the Chicago Board of Trade ended mostly lower on Friday, but trimmed losses by the close in a light consolidation following extreme volatility this week, traders said. Wheat was seen as overbought after strong export demand and tight world supplies drove the market to fresh 11-year highs above $7 per bushel this week.
However, export business remained brisk, a factor that underpinned values. Tunisia bought 175,000 tonnes of optional-origin soft milling wheat in a tender, and Taiwan set a tender for Tuesday to buy 92,000 tonnes of US wheat. CBoT September wheat closed 1 cent lower at $6.72 per bushel, with December up 1 at $6.88-1/2.
Back months ended down 1-1/2 to 8-1/2 cents, pressured in part by expectations of an expansion in world wheat plantings for the 2008 harvest. Funds were roughly even on the day, traders said. The wheat market shrugged off a decision by the US Federal Reserve to cut the discount rate, a move that buoyed the US stock market and helped lift corn and soybeans after a big sell-off on Thursday.
Also bearish, traders noted talk of investors selling wheat and buying corn on inter-market spreads. The premium for wheat over corn has soared to historic levels in recent weeks. "You've got a lot of people who would like to sell wheat and buy corn and beans. But, with so much volatility ... it's hard to step up and put a new position on until you see more stability in the marketplace," said ADM Investor Services analyst Steve Freed.
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