Spring wheat futures at the Minneapolis Grain Exchange closed mostly lower on Monday, retreating on profit-taking after the spot December contract set a seven-week high overnight, traders said. "People were quick to sell as they realised there was no follow-through buying. But we've held together after the rally over the last two weeks," a Minneapolis trader said.
Declines in outside markets, including Chicago Board of Trade wheat and corn, and US crude oil, added pressure. Spring wheat traders also noted light hedge-related selling. Minneapolis December spring wheat fell 10 cents to close at $8.98 per bushel, with March down 9 at $8.81.
The December/March spread traded mostly at an inverse of 16 to 17 cents, after reaching 19 cents at the open, traders said. Volume was estimated by the exchange at 8,121 contracts, up from 5,489 lots on Friday. Concerns about dry weather in the southern US Plains hard red winter wheat belt helped underpin new-crop wheat futures in Chicago and Kansas City.
After the close, the US Department of Agriculture said 44 percent of the US winter wheat crop was rated in good to excellent condition, down from 45 percent the previous week and 53 percent a year ago.
Wheat ratings also showed deterioration in Argentina due to recent cold spells, the Buenos Aires Grains Exchange said in a weekly report. The exchange said 60 percent of the crop was rated good or very good, down from 73 percent a week. Weekly US export inspection data was bearish. USDA said 15.109 million bushels of US wheat were inspected for export last week, below trade estimates for 18 million to 24 million.
But there was some bullish export news overnight. India's state-run PEC Ltd set a tender to buy 350,000 tonnes of wheat. India does not usually buy US wheat, but any purchase would further tighten global wheat stocks. Also, Russian wheat prices have rebounded in the past week on expectations the government will not extend export restrictions until January 2008.
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