Spring wheat futures on the Minneapolis Grain Exchange closed mostly lower on Wednesday, retreating after the spot contract rose to a new 11-year high, traders said. A downturn in the Chicago wheat and corn markets dragged on values.
CBOT July wheat ended down 2-1/2 cents at $6.06 per bushel and July corn fell 12-3/4 cents at $3.43-3/4. MGE July wheat settled down 11 cents at $6.09 per bushel after surging to $6.31, a contract high and the highest spring wheat spot price since 1996.
Back months ended up 3-1/4 to down 12 cents, with September up 3-1/4 at $6.15-3/4 and December down 1/4 at $6.21. Contract highs were hit in several months. Volume was heavy, estimated by the exchange at 11,844 contracts.
The July/September spring wheat spread weakened, with the last trade at a carry of 1-1/2 cents. The spread had inverted in recent days, trading at a inverse of 5 to 7 cents on Tuesday as commercials scrambled to cover their needs for old-crop spring wheat.
The demand reflected concerns about the quality of the new winter wheat crop.
Spring wheat futures firmed early in the session as the Minneapolis market continued to react to a sharp drop in Canadian wheat plantings, announced on Tuesday.
Other bullish news included Egypt buying 55,000 tonnes of US soft red winter wheat along with 60,000 tonnes of Russian wheat. And Iraq issued a new tender to buy 50,000 tonnes of hard wheat. Continued harvest delays in the southern US Plains winter wheat belt remained supportive as well.
In other wheat news, Japan bought 110,000 tonnes of Canadian Australian and US wheat at its weekly tender.
A US Wheat Associates spokesman said the United States is not likely to bid on Indian wheat tenders due to stringent quality requirements. India this week tendered to buy 1 million tonnes of wheat. Excessive rains have raised concerns about Western Europe's wheat crops.
French grain analyst Offer et Demand auricle cut its estimate of the French 2007 wheat harvest to 34.3 million tonnes, down 500,000, due to recent wet weather.