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CBOT wheat spreads drop after heavy Andersons Inc deliveries

(Refiles to fix headline's description of spreads)

By Michael Hirtzer

CHICAGO, Nov 30 (Reuters) - Chicago wheat futures spreads tumbled on Thursday after larger-than-expected deliveries against futures by grain handler The Andersons Inc in Maumee, Ohio, traders and analysts said.

The Andersons registered 2,000 contracts to deliver against futures and Wells Fargo issued the deliveries against Chicago Board of Trade December wheat on first notice day, CME Group data showed.

CBOT December wheat futures settled 7-1/4 cents lower to $4.09-1/4 per bushel while the more actively traded March contract was down only 1-3/4 cents at $4.33. The spread between the contracts (1WZ7-H8) dropped to a lifetime low of a December discount of 24 cents, before settling at 23-3/4 cents, down 5-1/2 cents.

"The jump in registrations yesterday is obviously putting some pressure on the (CBOT) December, relative to the back months," Futures International analyst Terry Reilly said.

During the delivery cycle, which lasts two to three weeks, the futures market acts as a cash market and companies holding short futures positions can issue their intentions to deliver the physical commodity.

Because of the relatively strong cash market for wheat, traders and analysts surveyed by Reuters expected zero to 500 deliveries against CBOT wheat.

Mondelez International's soft wheat mill in Toledo, Ohio, near the Maumee futures delivery point, is one of biggest flour mills in the country and was bidding 20 cents over CBOT March futures for wheat in the local cash market, traders said.

"It would suggest that the delivery was not their best sale," Cascade Commodity Consulting LLC founder Al Conway of said, adding that selling wheat in the cash market could have netted the company nearly 40 cents per bushel more than delivering against futures.

Other traders speculated the wheat registered for delivery was of poor quality that the mill might have rejected.

The Andersons declined to comment. (Additional reporting by Julie Ingwersen; editing by G Crosse, Tom Brown)