Wheat futures on the Chicago Board of Trade were higher at midsession on Friday as concerns about tightening world wheat supplies for 2007/08 prompted short covering, traders said. Traders were also adjusting positions ahead of a long holiday weekend. US markets will be closed on Monday for Memorial Day.
CBOT wheat is the only grain in which large speculators hold a net short position, traders said. As of 11:30 am CDT (1630 GMT), July wheat was up 4 cents at $4.95 per bushel. The contract broke through all its key moving averages this week, with first support at the 20-day MA of $4.89-1/2.
Deferred months were up 2 to 4 cents. Fimat USA bought 300 July contracts, traders said, while Tenco and Man Financial each sold 300 to 500 July. June wheat options were set to expire at the close. Ukraine was at the centre of world supply worries. About 60 percent of Ukraine's crops were suffering from drought, the head of the country's meteorological centre said Friday.
Ukraine's Agriculture Ministry said drought has killed about 400,000 hectares (988,000 acres) of crops. Concerns about Ukraine's harvest prospects helped lift French wheat futures to seven-month highs. The fears come amid forecasts for a drop in world wheat supplies. The US Department of Agriculture earlier this month projected global wheat ending stocks for 2007/08 would drop to 26-year lows.