MGE spring wheat lower

Spring wheat futures on the Minneapolis Grain Exchange closed lower on Tuesday, setting back from last week's 11-year highs on improved US spring wheat crop ratings, traders said. The US Department of Agriculture late on Monday said 85 percent of the US spring wheat crop was rated in good to excellent condition, up from 81 percent the previous week.
The improvement in ratings came despite some heavy rains in the past week that prompted flood warnings around the Red River Valley, a key spring wheat area spanning the North Dakota/Minnesota border. A projection for a large Australian wheat crop also weighed on the market, as did a report of strong crop prospects in Germany.
Those outlooks helped soothe fears about tightening world wheat supplies, which last week drove US wheat futures to their highest levels since 1996. Minneapolis July spring wheat ended down 13-3/4 cents at $5.70-1/4 per bushel, with September down 13 at $5.82 and December down 16 at $5.91-1/2. Funds were net sellers of roughly 750 contracts, traders said. Volume was estimated by the exchange at 8,465 contracts.
The July/September spread traded mostly at a carry of 8 to 9-1/2 cents, although it narrowed briefly to 7-1/2, traders said. Traders also noted inter-market spreading, with firms both buying and selling Minneapolis against Kansas City wheat.
Spring wheat had slipover pressure from the Chicago and Kansas City wheat markets, which declined amid forecasts for improved harvest weather in the southern US Plains. A plunge in corn futures to their 20-cent daily trading limit pressured wheat as well. CBOT July wheat closed down 20 cents at $5.81 and KCBT July wheat ended down 22-1/2 at $5.69-1/4.
In global news, the Australian government on Tuesday projected that country's wheat crop to more than double this year, to 22.5 million tonnes. In western Europe, German trading house Toepfer International estimated Germany's 2007 wheat harvest at 21.5-22.3 million tonnes, up from a May estimate of 20.8 million.
Rains in much of Germany since May had improved wheat prospects after drought, the firm said in a report. On the export docket, Japan said it offered to buy 93,500 tonnes of Canadian Australian and US wheat at its weekly wheat tender.