Spring wheat futures on the Minneapolis Grain Exchange closed sharply higher on Wednesday, with spot July hitting a fresh 11-year high as the Chicago and Kansas City wheat markets surged, traders said. Concerns about tightening world supplies harvest delays in the southern US Plains and signs of export demand lifted wheat futures at all three markets.
Minneapolis July spring wheat settled up 20-1/4 cents at $5.90-1/2 per bushel after reaching $5.97, a contract high and the highest spring wheat spot price since 1996.
September ended up 14-1/2 cents at $5.96-1/2 after posting a contract high at $6.07, and December ended up 16-3/4 at $6.08-1/4. Volume was estimated by the exchange at 8,497 contracts.
CBOT July wheat settled up 24 cents at $6.05 after rising to $6.11 which was its 30-cent daily trading limit. KCBT July ended up 17-1/4 cents at $5.86-1/2. Rain continued to cause problems in the southern US Plains, where farmers were struggling to harvest hard winter wheat. Showers soaked the area on Tuesday, generating 0.5 to 2 inches of precipitation in areas that were already saturated.
Signs of rising demand for US wheat on the world market were also bullish. Iraq sought to import 350,000 tonnes of wheat flour.
Egypt, another key wheat buyer, approved 2 billion Egyptian pounds ($351 million) in extra spending by the country's main wheat buyer, the General Authority for Supply Commodities, due to high global commodity prices. And Morocco's imports of soft wheat will triple in 2007/08 to roughly 3 million tonnes, the country's millers' group said in an interview.
South Korea was seeking 42,700 tonnes of US wheat, and Taiwan sealed a deal to buy 89,910 tonnes of US wheat. Meanwhile, on the supply side, drought-hit Ukraine imposed a prohibitive 3,000-tonne export quota on wheat, as well as other grains, for a three-month period starting July 1.