Hard red winter wheat futures at the Kansas City Board of Trade closed lower on Tuesday, ending a session filled with speculation about the impact of Hurricane Katrina on Gulf export channels and futures contract deliveries, traders said.
The market closed 1 cent to 8-1/4 cents lower, with the September at $3.47 per bushel, down 8-1/4 cents, and December down 1-3/4 cents at $3.52.
ADM bought 300 December and sold 600 December, General Mills sold 500 December, Man Financial bought 300 December, Fimat USA bought 250 December, while Cargill Investor Services sold 200 September and 350 December, pit sources said.
Prudential did 750 buying September and selling December lots, while CIS spread 600 September/December from even money to 3-1/2 cents.
Among those buying December and selling the September, Fimat did 700, ADM did 500, and UBS did 400 of the spreads. Buying December and selling March, Prudential did 1,000, pit sources said.
Traders said long liquidation of the September contract, which fell as low as $3.43 on the day, was a focus Tuesday ahead of first notice day on Wednesday for deliveries against the September futures contract.
There is speculation that deliveries might be higher than expected because of loading difficulties at Gulf ports in the wake of Hurricane Katrina. Major US exporters such as Cargill Inc, Bunge Ltd and Archer Daniels Midland Co may need to deliver some of the grain that had been earmarked for export.
"The unknown is always bearish," said one trader.
General wheat news was largely neutral for pricing.
Fall planting was underway in Colorado with about 4 percent of the crop in the ground as of Sunday, according to the US Department of Agriculture. And in Oklahoma, wheat seeding was about 2 percent as of Sunday, according to USDA.
USDA said Monday that 76 percent of the new US spring wheat crop was harvested as of Sunday. Vomitoxin continued to be an issue of concern in the spring wheat crop.
The nine-day relative strength index for September wheat stood at 52 after Tuesday's close. Chart watchers consider 70 or above to be a sign of an overbought market, while 30 or lower is considered indicative of oversold conditions.