Soft red winter wheat futures at the Chicago Board of Trade closed mostly lower on Monday on profit taking after last week's supply-driven surge to 11-year highs, traders said. Also bearish were outlooks for drier weather in the US Plains late this week, which should allow farmers to resume the harvest of hard red winter wheat after rain-related delays.
"We're cautiously optimistic ... this would be a very favourable forecast for harvest if it verifies," DTN Meteorlogix forecaster Mike Palmerino said. Nearby months led the wheat market down, losing ground to deferreds as spreads corrected. Nearby wheat was also weak relative to corn as firms unwound long wheat/short corn spreads.
CBOT July wheat settled 5-1/2 cents lower at $6.01 per bushel, with back months down 4 to up 5 cents. September ended down 3-1/4 at $6.17-1/2 and December was up 3/4 cent at $6.22-3/4. Funds sold 2,000 contracts, traders said. Volume was on the heavy side, estimated by the CBOT at 88,647 wheat futures and 10.885 options.
Nearby contracts were technically overbought and due for a downward correction. The nine-day relative strength index for July stood at 88 ahead of the open and fell to 82 by the close, staying within the 70-to-100 range that technical traders view as an overbought signal.
Aside from the improving US harvest weather, fundamental news for wheat had a bullish slant. A Ukrainian government official on Monday estimated Ukraine's wheat harvest at about 12 million tonnes, below the US Agriculture Department's June estimate of 14 million. Romania might import up to 1 million tonnes of wheat this year to cover a domestic shortfall due to drought, a grain producers' group said.
Morocco's state grain agency said it was tendering to import 250,000 tonnes of US soft wheat and 90,000 tonnes of US durum, plus 250,000 tonnes of European Union soft wheat.
Earlier, Morocco postponed a tender to import 298,636 tonnes of soft wheat to June 21. Weekly US export data was supportive. The US Department of Agriculture said 16.4 million bushels of US wheat were inspected for export last week, above estimates for 11 million to 16 million.
The first harvest report from Kansas Wheat, a trade group, said moisture levels in wheat made it too wet for harvest this weekend in parts of Kansas, the top US wheat state. Test weights of harvested wheat were dropping in some areas.
After the close, the USDA said 50 percent of the US winter wheat crop was rated in good to excellent condition, down from 52 percent the previous week. The harvest remained behind schedule, with 11 percent cut, compared with the five-year average of 20 percent.
Harvest was expanding into the soft red winter wheat belt, with the crop 39 percent cut in Illinois and 18 percent cut in Indiana. Spring wheat ratings improved, with 85 percent of the crop rated good to excellent, up from 81 percent a week earlier.
The supplement to the US Commodity Futures Trading Commission's report on Friday showed large speculators (excluding index funds) expanded their net long position in CBOT wheat futures to 13,123 contracts as of June 12, up roughly 10,000 lots. Index funds cut their net long to 174,531 lots, down 4,800.