Wheat futures on the Chicago Board of Trade closed lower on Thursday, losing ground to the Kansas City and Minneapolis markets after the USDA adjusted its wheat ending stocks by class, traders said.
The US Department of Agriculture in its November supply/demand reports cut its estimate of US hard red winter carry-out by 10 million bushels and raised HRW exports by the same amount.
USDA upped the carry-out of US soft red winter and durum wheat by 5 million bushels apiece after cutting SRW and durum exports. Traders said the changes helped build the premium for Kansas City and Minneapolis wheat over Chicago.
"We continued to see spreading going on between the inter-market classes. There was still some buying going on in Kansas City and Minneapolis, and selling Chicago against it," Citigroup analyst Dale Gustafson said.
CBOT December wheat closed down 5-1/4 cents at $3.09-3/4 per bushel but held above its contract low of $3.08-3/4, set on Monday. Deferreds closed down 3 to 6 cents.
Funds sold 4,000 contracts on the day, adding to their net short position in CBOT wheat.
Trading volume was heavy as funds continued to roll positions forward ahead of first notice day for the December contract on November 30. Volume was estimated by the exchange at 76,966 futures and 4,881 options.
CBOT December rallied briefly early in the session, with buy-stops hit around $3.15-1/2, traders said. But prices turned lower when follow-through buying failed to emerge.
USDA pegged 2005/06 US all-wheat ending stocks at 530 million bushels, unchanged from October but below an average of analysts' estimates for 537 million.
USDA's weekly export sales report underscored foreign buyers' recent preference for hard wheat.
USDA reported export sales of US wheat last week at 1.397 million tonnes, including a sale of 800,000 tonnes of HRW wheat to Iraq. Weekly sales of SRW wheat totalled only 10,900 tonnes.
Export activity overnight included Japan's purchase of 142,000 tonnes of wheat, with 86,000 tonnes coming from the United States.
Jordan postponed a tender to buy 100,000 tonnes of wheat following the series of bomb blasts in the country's capital of Amman.
Private forecaster Meteorlogix said more rain was needed in the southern portion of the US Plains hard red winter wheat belt. Above to much above normal temperatures and below-normal rainfall were stressing crops in Texas and Oklahoma.
Conditions were mostly favourable in the Midwest soft red winter wheat belt, Meteorlogix said, but more rain would help southern reaches of the region. Cash basis bids for SRW wheat were steady.