Spring wheat futures at the Minneapolis Grain Exchange closed sharply higher on Wednesday, posting contract highs on slipover strength from the soaring Kansas City and Chicagoo wheat markets, traders said. Some concern about flooding in the northern US Plains spring wheat belt added background support.
July spring wheat closed up 19 cents at $5.81 per bushel after rising to $5.90, which marked the highest spot spring wheat price in 11 years. Back months ended up 1 to 20 cents. Volume was heavy, estimated by the Minneapolis exchange at 9,712 futures.
The Chicago and Kansas City wheat markets also posted fresh 11-year highs and nearby months briefly rose their 30-cent daily trading limit as jitters about US winter wheat harvest delays, tight world wheat supplies and bullish technical signals ignited speculative buying. KCBT July wheat closed up 29-1/2 cents at $5.88-1/2 a bushel and CBOT July ended up 24-1/2 at $5.89-1/2.
Fundamentally, wheat production concerns centred on Ukraine and Russia, which have been hit with drought, and the United States, where rains in the southern Plains have disrupted the harvest of hard red winter wheat. "Especially where most of the harvest is concentrated right now in Texas and Oklahoma, they are going to be in and out of showers at least through the weekend," DTN Meteorlogix forecaster Mike Palmerino said.
News that India will tender for 2 million tonnes of wheat by the end of June added support. In other export news, Brazil bought three cargoes of western Canadian wheat totalling 80,000 tonnes, the Canadian Wheat Board said.
US exporters were expected to raise the price of wheat they offered to sell Iraq following rallies this week. US hard red winter wheat now costs about $250 to $255 per tonne FOB to a high-risk destination such as Iraq, US traders said. At the end of May, Iraq was offered US and Canadian wheat at about $225 per tonne FOB, said grain trade sources in Jordan. "No one is offering that price any more," a US wheat trader said.