CBoT wheat settles lower

Wheat futures on the Chicago Board of Trade closed lower on Wednesday after a day of see-saw trade, weighed by a slowdown in export business and ideas the market was overpriced, traders said.
"It's really a market that is searching for a price level that will bring the buyers back, and the market does not see that we are at that price level quite yet," Prudential Financial grains analyst Shawn McCambridge said.
Trade was choppy. Wheat turned higher several times on spillover strength from soybeans and corn, which rallied as US crude oil futures soared to a record high above $94 per barrel on a surprise drop in weekly US crude inventories. But given its limited role as a biofuel, wheat does not track the energy markets as closely as corn and soy.
CBoT December wheat closed 6 cents lower at $8.08 per bushel. March fell 6 cents to settle at $8.29-1/2, while new-crop July ended down 3 at $6.72-1/2. Commodity funds sold 2,000 contracts, traders said. Volume was estimated by the CBoT at 71,171 wheat futures and 12,466 options.
In Paris, milling wheat futures closed mixed, up 0.50 to down 1.00 euros per tonne. CBoT traders shrugged at potentially bullish news that Tunisia issued a tender to buy nearly 100,000 tonnes of optional origin milling wheat and 50,000 tonnes of US dark northern spring wheat.
The market also had little reaction to comments from a Russian government official who threatened further grain export restrictions to contain inflation, if world prices keep rising. "In the case that world prices rise further, the Russian government will drastically restrict grain sales for export," Agriculture Minister Alexei Gordeyev said in a statement, without giving more details.
Less than two weeks ago, rumours of potential Russian wheat export tariffs sent CBoT wheat prices soaring. Futures later retreated on word that Russia shelved those plans.
In other news, India, the world's No 2 wheat importer, said it plans to limit its purchases this year at 2.3 million tonnes due to adequate stocks. India has already contracted to import 1.3 million tonnes of wheat in 2007 and is expected to tender soon for another 1 million tonnes. India earlier said it planned to import around 5 million tonnes of wheat in 2007 to build buffer stocks.