Spring wheat futures at the Minneapolis Grain Exchange closed mostly lower on Wednesday in a technical setback from sharp, weather-driven advances this week, traders said. Traders also cited some updated forecasts calling for a bit more rain in the northern US Plains spring wheat belt.
Dry conditions have been stressing the spring wheat crop, a factor that drove wheat futures higher this week. Spring wheat crop prospects have become a key issue for the market, after drought slashed production of the US hard red winter wheat crop, tightening US wheat supplies.
MGE July settled up 1/4 cent at $4.82 per bushel, while September ended down 2-1/2 at $4.82 and December was down 3/4 cent at $4.88-3/4. ADM Investor Services sold 400 December and 300 September contracts, while UBS Warburg was a net buyer of 300 July, traders said.
Bull spreading supported front-month July as traders exited positions ahead of first notice day for deliveries on Friday. Traders noted that open interest in July was less than 2,000 contracts ahead of the open.
Volume was estimated by the exchange at 5,873 contracts, down from 9,007 lots on Tuesday. Traders were adjusting positions ahead of the US Agriculture Department's June plantings and quarterly grain stocks reports on Friday.
Traders expected the USDA to raise its spring wheat acreage estimate from its March 31 projection of 13.9 million acres. The average spring wheat seedling estimate among analysts surveyed by Reuters was 14.5 million acres.
In export news, India finalised a deal to import 2.2 million tonnes of wheat from five international bidders, and Indian wheat futures eased amid the news. Export traders speculated that the wheat would probably be soft wheat from France or the Black Sea region.
The Indian government also cut the import duty on wheat to 5 percent from the current 50 percent to control inflation. Agriculture Canada forecast Canada's wheat production excluding durum at 22.5 million tonnes, up 8 percent from 2005, because of larger harvested area offset by lower yields.