Wheat futures on the Chicago Board of Trade closed lower on Thursday on weak export demand for US soft red winter wheat and on spillover weakness from corn, traders said. Trade was choppy early in the session and remained light throughout the day.
"The slow activity is indicative of a lack of conviction on either side of the market," Prudential Securities analyst Shawn McCambridge said.
September wheat ended down 1 cent at $3.25 per bushel, with deferred months down 1/2 to 2 cents.
Funds sold 1,000 to 1,500 contracts, traders said.
Volume was estimated by the exchange at 38,581 futures and 5,911 options.
There was bullish export news for US wheat, including an Egyptian purchase of 60,000 tonnes of US soft white wheat.
But demand for soft red winter wheat, the type traded in Chicago, was lacking. That point was underscored by the US Department of Agriculture's weekly export sales report.
USDA reported sales of US wheat for last week at 862,300 tonnes, well above trade estimates for 350,000 to 550,000 tonnes. But only 81,500 tonnes - less than 10 percent of the total - was soft red winter wheat.
About half of the week's sales were hard red winter wheat, a factor that boosted hard red winter wheat futures at the Kansas City Board of Trade.
The HRW tally included a sale of 55,000 tonnes to Iraq.
In a bearish note, Japan bought 45,000 tonnes of wheat from Canada at its weekly tender and none from the United States.
After the markets closed, the Canadian Wheat Board forecast a smaller wheat crop for Canada's main crop region for the 2005/2006 marketing year, but said exports were set to grow.
All-wheat production would drop to 22.7 million tonnes from 24.0 million in Western Canada, CWB officials said.
Some observers said wheat was starting to divorce itself from price trends in corn and soybeans, but others said wheat was still influenced by outside markets.
"If the corn market, or even the bean market, was more active, we would see the wheat continue to follow to a certain degree," McCambridge said. Cash basis bids for soft red winter wheat in the US Midwest were steady.
US crop weather has moved to the background as a wheat market factor. Conditions for the maturing spring wheat crop were satisfactory in the northern US Plains, the Meteorlogix weather service said.