MGE spring wheat plunges

Spring wheat futures at the Minneapolis Grain Exchange fell more than 3 percent on Tuesday, in line with a technically motivated sell-off in Chicago Board of Trade wheat, traders said. Also bearish was an absence of fresh export news for wheat, despite a drop in the value of the US dollar.
Wheat futures in Minneapolis, Chicago and Kansas City turned lower shortly after the bell, weighed by a lack of follow-through buying after on Monday's late rally. Nearby contracts at all three markets eventually fell the daily limit of 30 cents a bushel, although Minneapolis and Kansas City wheat rebounded slightly by the close. Minneapolis December springs wheat ended down 29 cents, or 3.3 percent, at $8.56 per bushel. March fell 28-3/4 cents to close at $8.59-1/4.
The December/March spread traded at a carry of 2 to 2-1/2 cents, traders said. Volume was estimated by the Minneapolis exchange at 8,204 contracts, with 721 cash exchanges. Traders were disappointed by a lack of confirmation of Monday's rumour that Russia would impose steep tariff on Russian wheat exports.
Talk on Monday that the tariff might be as high as 50 percent had lifted US wheat values. The tariff talk followed a period of heavy Russian wheat exports. SovEcon, a Moscow-based independent research organisation, on Tuesday estimated Russia's wheat exports in October at a record high 2.2 million to 2.4 million tonnes.
SovEcon also raised its 2007 wheat production forecast to 47.0 million to 48.25 million tonnes, from the previous 45.5 million to 47.0 million, citing a larger-than-expected crop in Siberia. Traders shrugged off a drop in weekly stocks of deliverable spring wheat. The exchange said deliverable stocks at Duluth/Superior fell to 19.605 million bushels, down from 22.775 million the previous week.
But concern about flourmills in the US Midwest taking in Canadian soft wheat added pressure. At the CBOT, front-month contracts were hit by the talk of Canadian wheat imports, losing ground to new-crop contracts for delivery in 2008.