US wheat futures mixed

US wheat futures closed mixed in volatile trade on Wednesday, with the Minneapolis spring wheat market soaring to an all-time high toward the close on commercial buying and firm cash markets, traders said.
The late surge at the Minneapolis Grain Exchange, the smallest of the three US wheat markets, lifted futures at the Kansas City Board of Trade and brought Chicago Board of Trade wheat off its lows. However, CBOT nearby wheat contracts closed lower on profit-taking after the run-up in prices from Friday to Tuesday. Also bearish were recession fears that triggered a broader sell-off in commodities, dragging down gold and crude oil as well as corn and soybeans.
CBOT March wheat ended down 5-1/2 cents at $9.26-1/2 per bushel. New-crop July was up 1-1/4 at $8.51-1/2. But the dramatic, late surge in Minneapolis was the hot topic among traders.
"The farm community seems to be holding on to stocks a little more aggressively in the northern (US) Plains. As such, it was Minneapolis that stole the show, moving to limit gains," said Dan Basse, president of AgResource Co in Chicago. MGE March spring wheat settled at $11.34-3/4 per bushel, up 27 cents, after reaching $11.37-3/4, the highest-ever price for any US wheat futures contract.
The contract traded the maximum one-day range of 60 cents, rising the 30-cent daily limit to its high, after plunging 30 cents at midsession to a low of $10.77-3/4. Minneapolis traders attributed the late rally to light commercial buying ahead of a weekly Japanese tender, coupled with a lack of sellers. Firm cash markets for spring wheat added support. Commercials were noted bull-spreaders, buying March against May, in a reflection of scarce cash supplies of spring wheat.
The MGE March/May spread traded out to a 45-cent inverse, premium March, up from 33 cents at Tuesday's close. "We're in a precarious situation because of historically small spring wheat stocks," said Jeremy Hjelm, a wheat merchandiser with the Lansing Trade Group in Minneapolis.
"There appears to be limited deferred coverage on the part of the mills, so they are going to need to buy spot shipments. They don't have much beyond 30 days out," Hjelm said. The relative weakness in CBOT wheat was in response to winter wheat acreage data issued last week by the USDA. The government showed a 21-percent increase in seedings of soft red winter wheat, the type traded in Chicago, and a surprise drop in hard red winter wheat, the type traded in Kansas City.
At the Kansas City Board of Trade, March hard red winter wheat settled up 3 cents at $9.59 a bushel. KCBT wheat was underpinned by worries about frigid air moving into the northern sections of the HRW wheat belt. Lows could fall to minus 10 to 15 degrees Fahrenheit in Montana with minimal snow cover, raising concerns about winter burn, DTN Meteorlogix said. But no crop-damaging cold weather was expected for the core crop region in the southern Plains, including Kansas.
In export news, Jordan will double its wheat stocks to shield itself from volatility in international markets, European traders said. One group of South Korean millers bought 23,700 tonnes of US wheat, while South Korea's Milmax Corp passed on a tender to buy 22,000 tonnes.