US wheat futures closed lower on Wednesday as word of much-needed rains in Australia and Argentina added to expectations of a bumper world wheat crop, traders said. Weak cash markets add pressure as producers and country elevators in US Midwest work to move soft red wheat into marketing channels, clearing space for corn/soya harvest.
Selling at the Chicago Board of Trade escalated as front-month September dipped below support at its 20-day moving average of $8.19-3/4 and later dropped below $8 for the first time in two weeks. At the CBOT, September soft red winter wheat settled down 27-3/4 cents, 3.3 percent, at $8.02-3/4 per bushel, after dipping to $7.97-1/4. December ended down 28-3/4 cents at $8.25-3/4.
Commodity funds were net sellers of 4,000 CBOT wheat contracts, traders said. Uncertainty looms as CME Group mulls changes to its CBOT wheat contract amid a lack of convergence between cash and futures values; traders watching for signs of sustained fund long liquidation. At the Kansas City Board of Trade, September hard red winter wheat fell 25-3/4 cents to close at $8.40 a bushel, with December down 25 at $8.63. At the Minneapolis Grain Exchange, September spring wheat settled 20 cents lower at $8.76 a bushel, with December down 21-3/4 at $8.88-1/2.
MGE spring wheat had underlying support from rains stalling the US spring wheat harvest, plus chilly weather in Canadian wheat areas. CBOT wheat volume heavy at an estimated 95,912 futures and 11,679 options. KCBT wheat volume estimated at 26,935 futures; MGE estimated at 12,060 futures. Rainfall likely over the next three to five days in Australian wheat growing areas, DTN Meteorlogix said.
But Australian Crop Forecasters expects to lower 2008/09 wheat forecast due to recent lack of rain. Showers expected in Argentina's Buenos Aires and southern Santa Fe wheat growing areas. Turkey tenders for 250,000 tonnes wheat, including 50,000 tonnes of US soft red winter wheat. Bangladesh tenders for 100,000 tonnes wheat.
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