Spring wheat futures on the Minneapolis Grain Exchange closed lower on Tuesday, retreating from last week's multiyear highs on stable US spring wheat ratings and generally favourable weather, traders said. The US Department of Agriculture late Monday said 79 percent of the spring wheat crop was rated in good to excellent condition, unchanged from the previous week.
USDA said 61 percent of the crop was headed, above the five-year average of 49 percent. Spillover weakness from declines in Chicago Board of Trade corn and soybeans added pressure. However, wheat futures at Chicago and Minneapolis came off their lows by the close on short-covering. MGE July spring wheat ended down 5 cents at $6.05 per bushel, with bellwether September down 2-3/4 at $6.02-1/4 and December down 1 at $6.09.
Volume was light, estimated by the exchange at 3,887 contracts. Traders were adjusting positions ahead of the US Independence Day holiday. The Minneapolis exchange will be closed for Wednesday's day session, reopening with the electronic night session. Intermarket spreading was quiet, with MGE December closing at a 12-cent premium to CBOT December wheat.
Traders were looking to sell Minneapolis if that premium climbs above 20 cents, and buy if the spread drops below 10 cents, one trader said. Crop conditions were mostly good in the northern US Plains spring wheat belt. Warm and mostly dry weather was forecast for the region through Saturday, with light scattered rain early next week.
"There is a bit of concern about getting a little too dry and a little too hot," DTN Meteorlogix forecaster Mike Palmerino said. "But they have got good soil moisture reserves, and there will be occasional showers around that will maintain pretty favourable conditions," he said.
There were no deliveries on the Minneapolis July contract for Tuesday. Export news was routine overnight. Japan said it would seek 100,000 tonnes of US, Canadian and Australian wheat at its weekly tender, and South Korean millers were seeking a total of 44,300 tonnes in two tenders.