US wheat falls

US wheat futures on the Chicago Board of Trade fell nearly 3 percent on Monday, pressured by rising world wheat supplies and a lack of fresh US export demand, traders said. CBOT wheat opened higher, following corn and soybeans, but quickly retreated on a lack of follow-through buying.
The market's inability to sustain the early rally triggered technical selling and profit-taking after last week's net rally. At the CBOT, September soft red winter wheat fell 25-1/4 cents, 2.9 percent, to settle at $8.40-1/4, near its 100-day moving average. December ended down 25-3/4 at $8.64-3/4. Commodity funds were net sellers of about 3,000 CBOT wheat contracts, traders said.
At the Kansas City Board of Trade, September hard red winter wheat fell 22-1/4 cents to close at $8.77-3/4 a bushel, with December down 23 cents at $9.00. At the Minneapolis Grain Exchange, September spring wheat ended down 23-1/2 cents at $9.14 a bushel, with December down 22-3/4 at $9.29-1/4. Favourable harvest weather in the northern US Plains spring wheat belt pressured the markets, especially Minneapolis, and weighed on cash values.
The MGE September/December spread traded out to a carry of 17-1/2 cents before settling at 15-1/2. September has been trading at a widening discount to December in recent days, following a brief inverse earlier this month. Reminders of large world wheat supplies helped anchor prices. Russia may harvest 95 million tonnes of grain in 2008, with wheat output at 54 million to 57 million tonnes, up from 49.4 million in 2007/08.
Forecasts for improved rainfall in Australia's wheat areas added pressure, although rain is needed in Argentina. On the demand said, Iran bought 150,000-200,000 tonnes Kazakh wheat; traders said they believed Iran was attempting to minimise purchases from the United States. Egypt govt says has wheat stocks for 4-1/2 months. EU wheat price must fall to raise exports -Toepfer.
USDA reported US wheat export inspections in the latest week at 23.734 million bushels, above estimates for 19 million to 23 million. CFTC's supplement on Friday showed large speculators cut their net short position in CBOT wheat to 16,697 contracts in the week ended August 19, down about 6,100 lots.