CBoT wheat futures down two percent

Wheat futures at the Chicago Board of Trade fell 2 percent in value on Monday on follow-through weakness from Friday, when prices plunged after hitting multiyear peaks, traders said.
The market opened higher Monday on a mix of bullish fundamental news, including export sales of US wheat to Guatemala, Egypt and Iraq. But prices soon turned down in volatile trade. Traders viewed wheat's sharp retreat on Friday from its new highs as a bearish chart signal. "I think this is a continuation from Friday's sell-off. It's technical follow-through after we had a textbook key reversal on Friday," one floor trader said.
CBoT July wheat ended down 12-1/2 cents at $5.69-1/2 per bushel, with most-active September down 13-3/4 at $5.83-1/4 and December down 13 at $5.97-1/2. September fell through support at its 20-day moving average of $5.91-1/2.
Funds were net sellers of 3,000 contracts, traders said. Volume was estimated by the CBoT at 84,314 wheat futures and 7,543 options. The Kansas City and Minneapolis markets led the way down. All three US wheat markets were setting back after tightening global wheat supplies drove futures to fresh 11-year highs on Friday.
KCBT September wheat closed down 10-1/2 cents at $5.84-1/2 and Minneapolis Grain Exchange September spring wheat ended down 19-1/4 cents at $6.05. In Kansas City, Fimat USA was a noted seller of 3,800 September contracts. Fundamental news was mostly bullish. Flooding in Texas, Oklahoma and south-east Kansas was delaying the hard red winter wheat harvest in those areas, forecaster DTN Meteorlogix said.
The Canadian Wheat Board said Canada's wheat output this year would slump by 20 percent, to 20 million tonnes. And a top Ukrainian weather forecaster estimated the country's drought-hit 2007 wheat crop at 12 million tonnes, below the USDA's June estimate of 14 million.
On the export docket, the US Department of Agriculture said US exporters sold 105,900 tonnes of wheat to Guatemala for 2007/08 delivery, including 42,700 tonnes of hard red winter, 38,900 tonnes of hard red spring and 24,300 tonnes of white wheat.
USDA reported weekly export inspections of US wheat at 22.2 million bushels, above trade estimates for 15 million to 20 million. Iraq finalised several deals to buy 300,000 tonnes of US hard wheat but was still negotiating terms of shipment, trade sources said Sunday. The purchases were for two tenders announced in May.
Egypt's main wheat buyer on Saturday bought 305,000 tonnes of wheat, including 175,000 tonnes of US soft red winter wheat. The rest was of Russian or Kazakh origin.
The CFTC's supplemental report on Friday showed large speculators (excluding index funds) widened their net long in CBoT wheat to 23,771 contracts in the week ended June 26, up 4,000 lots.
Deliveries on the CBoT July contract were light at 294 lots and there was strong commercial stopping, with the Term Commodities house account taking 116. After the close Monday, the USDA said the US winter wheat harvest was 40 percent complete, lagging the five-year average of 54 percent. However, the harvest pace was in line with or ahead of the average in some key soft red winter wheat states, including Illinois, Indiana and Ohio.