MGE wheat higher

Spring wheat futures at the Minneapolis Grain Exchange closed higher on Thursday, climbing to new contract and 11-year highs as the Chicago and Kansas City wheat markets soared, traders said. July spring wheat ended up 7 cents at $5.88 per bushel after reaching $5.94-1/2, the highest spot price for spring wheat since 1996.
Back months were up 11 cents to down 10. Volume was heavy, estimated by the Minneapolis exchange at 14,983 contracts. Spreading was a feature as firms rolled July positions forward. Man Financial bought 500 December contracts while UBS Warburg net bought 200 December, traders said.
CBOT and KCBT wheat rose to contract and 11-year highs on concerns about United States winter wheat harvest delays, tight world supplies and technical momentum. CBOT July wheat settled up 17 cents at $6.06-1/2 and KCBT July ended up 11-1/2 at $6.00.
Excessive rain continued to disrupt the hard red winter wheat harvest in the southern US Plains, with accumulations of 0.5 to 2.0 inches across most of Oklahoma and central Kansas since Wednesday.
US wheat markets have been surging since Monday, when the US Department of Agriculture projected that global wheat stocks would drop to 112.03 million tonnes by the end of 2007/08, the lowest level since 1977/78. The small stockpile means there is little room for further production shortfalls.
Yet, declining crop estimates continue to trickle in. French analyst Strategie Grains on Thursday cut its monthly estimate of the European Union's 2007 soft wheat output to 121.8 million tonnes, down 2.6 million, due mainly to drought in the eastern countries of the European Union.
After the close, the Canadian Wheat Board projected western Canadian all-wheat production for 2007/08 at 21.2 million tonnes, down from 24.4 million tonnes in 2006/07. Despite the sharp rally, fresh export demand also surfaced after the close, with Egypt's GASC saying it wanted to buy 55,000 to 60,000 tonnes of US, French, Australian, German, Argentine and/or Kazakh wheat for shipment July 11-20.
Tender results were expected on Friday. In its weekly export sales report, the USDA said 413,100 tonnes (2007/08) of US wheat were sold for export last week, above estimates for 200,000 to 400,000 tonnes.