Spring wheat futures at the Minneapolis Grain Exchange closed lower on Wednesday in a technical setback after most months hit contract highs on Tuesday, traders said. The market was also down in sympathy with declines in Chicago and Kansas City wheat.
July spring wheat ended down 10-1/2 cents at $5.26-1/4 per bushel, with September down 9 at $5.32-1/2 and December down 10 at $5.44. December spring wheat faced additional pressure from the unwinding of long Minneapolis/short Chicago spreads, Minneapolis traders said. Funds were net sellers of about 500 contracts. Country Hedging sold 1,000 December, traders said.
Volume was estimated by the exchange at 5,052 contracts, compared with 5,697 that traded on Tuesday. Wheat futures at all three US markets were following the trend in French markets, where wheat prices turned lower after rising to a 3-1/2-year high on Wednesday.
Additional pressure stemmed from an increased estimate of China's winter wheat crop. In a monthly report, the China National Grain and Oils Information Centre forecast that winter wheat production would rise 0.3 percent in 2007 to 99.6 million tonnes.
A previous forecast had called for a decline. Hotter and drier weather was drying out saturated fields in the US Plains hard red winter wheat belt, helping the harvest to resume, but more rain was possible by the weekend, forecaster DTN Meteorlogix said.
There was little export news other than Japan saying it planned to buy 100,000 tonnes of US, Canadian and Australian wheat at its regular weekly tender on Thursday. The USDA was scheduled to release its weekly export sales report on Thursday, and traders were expecting US wheat sales of 300,000 to 400,000 tonnes (old and new crop years combined).