Wheat futures at the Chicago Board of Trade closed mostly lower on Monday in choppy trade, retreating from early strength as follow-through buying failed to materialise, traders said. "It was a sloppy, choppy day," one wheat trader said.
CBOT May wheat settled 2 cents lower at $3.50-3/4 per bushel, with July down 1-3/4 at $3.63-1/2. Funds were even to small net sellers, traders said.
Volume was estimated by the exchange at 42,769 futures and 4,854 options.
Wheat futures advanced early in the session on support from bullish weekly export data and continued concerns about the US hard red winter wheat crop.
The US Department of Agriculture reported weekly export inspections of US wheat at 19.1 million bushels, above trade estimates for 8 million to 13 million. USDA said 1.76 million bushels were earmarked for Iraq.
But the market struggled to assess the value of weekend rains in the HRW belt and outlooks for more this week. Rain and hail fell in Kansas and Nebraska over the weekend. More rain was forecast for Monday, but some traders said the moisture might be too little, too late for the drought-hit HRW crop.
Kansas City Board of Trade July hard red winter wheat futures settled down 1-1/4 cents at $4.43 after trading in a 9-1/2 cent range, from $4.40 to $4.49-1/2.
After the markets closed, the USDA said the US winter wheat crop was rated 39 percent good to excellent, matching the previous week's figure. But 34 percent was rated poor to very poor, up from 32 percent the previous week.
Traders had expected a slight decline in ratings.
The effects of heat and drought were reflected in the crop's advanced maturity. USDA said 26 percent of the crop was headed, above the five-year average of 14 percent.
In top producer Kansas, 20 percent was headed, compared with the five-year average of 2 percent.
The USDA said the US spring wheat crop was 20 percent seeded, lagging the five-year average of 27 percent. Traders had estimated spring wheat seeding progress at 15-20 percent.
Traders were awaiting planting estimates on Tuesday from Statistics Canada. The average Canadian all-wheat estimate among analysts surveyed by Reuters was 25.8 million acres, up from the 24.9 million acres seeded in 2005.
The average Canadian spring wheat estimate was 19.2 million acres, up from 17.9 million in 2005.
Exports were quiet over the weekend. Friday's CFTC Commitments of Traders report showed that large speculators reduced their net short position in CBOT wheat futures to 8,106 lots for the week ended April 18. For CBOT wheat futures and options combined, funds increased their net long position to 8,325 lots. Funds trimmed their heavy net long position in Kansas City wheat and expanded their net long in Minneapolis spring wheat.