Wheat futures on the Chicago Board of Trade closed mixed on Friday in volatile trade, with the March contract roaring to an all-time high on scarce supplies and technical buying, traders said.
The regional wheat exchanges hit new spot-month highs, with Kansas City December wheat settling at $10.00 per bushel and Minneapolis December settling at $11.30 at expiration.
The market overcame bearish news, including a stronger US dollar and Egypt's cancellation of a wheat import tender. "This has been an impressive day in light of the news that we had this morning, with Egypt passing," said Rich Feltes, senior vice president and director of MF Global Research, who noted that CBoT corn and soybeans closed higher as well.
"I think this is an indication of the money that is still coming into the agricultural patch," he said. However, deferred contracts representing new-crop wheat plunged on an improved outlook for the 2008 crop, especially in the southern US Plains.
Snow was expected this weekend in the region, forecaster DTN Meteorlogix said, following storms earlier this week that produced up to 2 inches of moisture. That should buoy prospects for hard red winter wheat, the largest US wheat class.
Bellwether CBoT March wheat settled up 26 cents at $9.79-1/2 per bushel, while new-crop July ended down 19-1/2 cents at $7.88. The spread, or price difference, between the March and July contracts exploded this week, widening by nearly 80 cents in two days to close at an inverse of $1.91-1/2 per bushel.
The spot December contract expired quietly at $9.39, up 5 cents on the day. Deliveries on the December totalled 210 contracts, and a Banc of America customer stopped 162 lots.
There were 23 deliveries for Kansas City December wheat and none for Minneapolis December spring wheat. Commodity funds were net buyers of 5,000 CBoT wheat contracts, traders said. Volume was estimated by the CBoT at 99,120 wheat futures and 8,692 options.
Continued bullish talk of deliverable grade soft red winter wheat being loaded out of Toledo, Ohio, for export helped support nearby months, traders said. Back months were pressured by a bearish wheat acreage projection for 2008 from consulting firm Informa Economics. The firm projected US all-wheat plantings for 2008 at 64.5 million acres, up from its November forecast of 64.1 million and higher than the 60.4 million acres planted to wheat in 2007.
However, Informa showed 2008 plantings of spring wheat other than durum at 13.0 million acres, down from 13.3 million in 2007 - a supportive factor for new-crop spring wheat futures. The nine-day relative strength index for CBoT March was in overbought technical territory, rising to 80, from 75 ahead of the open. Chart-based traders view an RSI of 70 to 100 as an overbought signal.
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