Wheat futures at the Chicago Board of Trade ended sharply higher on Friday, fresh one-month highs were set, several months touched limit-up in late trading and deferred months set new tops as traders rang in the new year with a round of massive commodity fund buying, traders said.
CBOT wheat closed 15 to 28-3/4 cents per bushel higher, with March up 28-3/4 at $4.05-3/4 per bushel.
The fundamental catalyst for the gains was mounting optimism that China this year might buy a large amount of wheat from the United States. "It was export and spec related. We continue to see and hear optimism over China business, and obviously the funds are the big buyers," said Randy Mittelstaedt, analyst for Chicago-based trade house R.J. O'Brien.
The wave of speculative demand that began at the opening bell set off a technical buying spree that drove the bellwether March through buy-stops as it first gapped above its 100-day moving average, then again at its 50-day moving average.
The nearby contracts touched up the 30 cents trading limit in late dealings, the first time that has happened since the trading limits were expanded from 20 cents to 30 cents in the fall of 2000.
The wheat market was put on notice earlier this week by news that China will send a wheat buying delegation to the United States, traders said. USDA said on Friday that exporters had reported a switch of 105,000 tonnes of spring wheat to China from unknown destinations, and wheat jumped 2-1/2 to 7-1/4 cents in the inaugural trade of the overnight e-cbot electronic trading session.
The previous a/c/e overnight session had ended about six weeks ago as exchange personnel began preparing for the new e-cbot trading system.
Wheat futures fell earlier this week on talk that China was buying wheat from Australia and Canada and possibly cancelling US commitments.