Soft red winter wheat futures at the Chicago Board of Trade closed mostly higher on Thursday on supportive export data, but lost ground to Kansas City wheat on inter-market spreads, traders said.
The moves came after the US Department of Agriculture adjusted its US wheat production estimates by class. USDA cut its crop estimate for hard red winter wheat, the type traded at Kansas City, to 964 million bushels, below the average trade estimate of 995 million.
The government raised its production forecast for soft red winter wheat, which is traded in Chicago, to 364 million bushels, above the consensus trade estimate of 352 million.
Firms also bought corn and sold Chicago Board of Trade wheat on forecasts for hot weather in the US Corn Belt. CBoT September wheat ended down 1/2 cent at $6.21-1/2 per bushel, with December up 2-3/4 cents at $6.36-3/4 and deferred months up 1 to 6 cents.
Spot July, which is in delivery, rose 1/2 cent to close at $6.11-1/2. Funds were even to small net buyers, traders said. Volume was estimated by the CBoT at 70,709 wheat futures and 9,649 options. At the Kansas City Board of Trade, September HRW wheat ended up 7 cents at $6.11 per bushel.
Weekly export data gave both markets a lift, reflecting strong demand for US wheat, despite historically high futures prices. USDA reported export sales of US wheat last week at 1,183,400 tonnes, well above trade estimates for 700,000 to 800,000.
"The huge export sales that we had is not signalling any kind of an economic rationing scheme yet," said Joe Victor of commodity research firm Allendale Inc.
There were signs of new demand as well. A subsidiary of Bunge Ltd in Brazil, Bunge Alimentos, said it plannl imports of North American wheat this year.
And European and US traders said Iraq may have made a major new purchase of US and Canadian hard wheat. Details were unclear, but traders were told that about 100,000 tonnes of US hard wheat had been purchased, along with about 100,000 tonnes of Canadian hard wheat.
In routine business, Japan bought 100,000 tonnes of US, Canadian and Australian wheat at its regular weekly tender. Aside from the class breakdown in US wheat estimates, USDA's July report had a mixed market impact. The government cut its estimate of 2007/08 US wheat ending stocks to 418 million bushels, down from 443 million in June and below the average trade estimate of 466 million.
However, on the world balance sheet, USDA raised its estimate of global wheat ending stocks for 2007/08 by 4.5 million tonnes, to 116.55 million, after raising production forecasts for China and Australia.
Still, the world wheat carry-out would be the lowest in 26 years. Deliveries on the CBoT July contract totalled 271 lots and there was strong commercial stopping, with the Term house account taking 257 lots.