CBOT wheat futures lower

Wheat futures at the Chicago Board of Trade closed lower on Wednesday, setting back from Tuesday's late rally as concerns eased about US and European wheat production, traders said. CBOT May wheat ended down 9 cents at $4.79-1/2, with new-crop July down 7-1/2 at $4.93-1/2 and December down 7 at $5.13-3/4.
Commodity funds sold 3,000 contracts, traders said. Volume was estimated by the CBOT at 51,941 wheat futures and 4,720 options.
Scouts on an annual three-day Kansas wheat tour said the yield potential of the state's hard red winter wheat crop was in line with last year, despite some damage from an early April freeze. Hard red winter wheat is the largest US wheat class, and Kansas is the largest producer.
With 209 fields surveyed on Tuesday, the Wheat Quality Council tour estimated an average yield of 40 bushels per acre, close to last year's tour average of 40.6 for similar areas. Early tour results on Wednesday also pointed toward healthy fields, with high yield potential. The tour was set to issue an overall production and yield forecast for Kansas on Thursday.
"The crop tour is indicating that yeah, there is some severe damage out there, but maybe not quite as much as we thought," Prudential Financial grains analyst Shawn McCambridge said. As a result, speculators have been reducing the weather premium that was built into the CBOT wheat market last month following the US freeze and concerns about dry weather in Europe.
"People still have some money in these long positions. So as concerns are starting to ease up, they feel a little more comfortable that they probably should liquidate," McCambridge said. Word of much-needed rainfall in southern Europe, including southern France, added pressure. European wheat prices declined on news of the showers, although more rain is needed in key French growing areas farther north.
Continued large deliveries on the CBOT May contract weighed on the spot month. There were 1,859 deliveries on the May for Wednesday, with only weak stoppers.Export business remained quiet, a bearish factor. The USDA was scheduled to issue weekly US export sales data on Thursday. Trade estimates for wheat ranged from 250,000 to 450,000 tonnes.