MGE spring wheat make gains

Spring wheat futures on the Minneapolis Grain Exchange closed sharply higher on Thursday in spread-dominated trade, with spot July leading the way up, brokers said. Fundamental news added support, including a large weekly US export sales figure and an outlook for tighter global wheat supplies from the London-based International Grains Council.
Minneapolis July spring wheat ended up 10 cents at $6.19 per bushel, with September up 6-1/4 at $6.22 and December up 9-1/2 at $6.30-1/2. Volume was estimated by the exchange at 9,161 contracts. The MGE July/September spread stayed volatile ahead of first notice day for July deliveries on Friday.
The spread firmed sharply, trading from a 12-cent carry into a slight inverse, and last traded at a 5-cent carry. Meanwhile, Country Hedging bought roughly 600 July contracts in outright trade, boosting the July against September, floor sources said.
Minneapolis wheat also gained against wheat futures in Chicago and Kansas City on intermarket spreads. The spot July contract in Minneapolis has drawn support in recent weeks as commercials try to secure supplies of old-crop spring wheat amid concerns about low protein in the new US hard red winter wheat crop.
"Millers and the flour guys are looking to get some quality. You are seeing a premium put on that," one trader said. In world wheat news, the International Grains Council on Thursday cut its 2007/08 world wheat production estimate to 614 million tonnes, down 7 million from its May forecast.
The IGC also pared its world wheat ending stocks forecast to 111 million tonnes, below the US Agriculture Department's latest estimate of 112.03 million. Weekly US export data was bullish. The USDA reported export sales of US wheat at 622,800 tonnes, above trade estimates for 200,000 to 400,000 tonnes.
Traders were awaiting USA's June plantings and quarterly stock reports on Friday. The average estimate among analysts surveyed by Reuters for 2007 US spring wheat acreage was 13.899 million, up from USA's March forecast for 13.808 million. Analysts pegged 2007 US seedlings of durum wheat at 2.072 million acres, up from the USA's March projection of 1.990 million.
The average estimate for US June 1 wheat stocks was 419 million bushels, below the 572 million of a year ago. The figure is up from USA's latest 2006/07-wheat ending stocks estimate of 417 million.