Chicago Board of Trade wheat futures closed lower on Tuesday, following the weak trend in soyabeans and corn amid a lack of supportive news, traders said. CBOT September wheat ended down 2-3/4 cents, or 0.9 percent, at $3.19-1/2 per bushel, with December down 3 at $3.34-1/2.
Funds sold between 1,000 and 2,000 lots. CIS was a late seller of 500 September, traders said.
Volume was moderate, estimated by the exchange at 47,496 futures and 5,982 options.
Wheat had underlying support from bullish moves in options trade. Refco was a noted buyer of September $3.20 calls and Man Financial bought $3.30 September calls.
But the futures market had little foundation for a rally, given weather-driven declines in soyabeans and corn. Soybeans led the way down, hit by forecasts for much-needed rain to cross the US Midwest.
Also bearish for wheat was news that the United States would lower duties on Canadian hard red spring wheat in response to a North American Free Trade Agreement panel decision in March.
The Canadian Trade Department said the US Department of Commerce had decided it would cut current countervailing duties to 2.54 percent, from 5.29 percent. However, the United States has an additional 8.86 percent anti-dumping duty.
The US spring wheat harvest was expanding and the winter wheat harvest was wrapping up, factors that hung over futures prices despite farmers' reluctance to sell much of their new-crop wheat thus far.
USDA said 23 percent of the US spring wheat crop was harvested as of Sunday, up from 7 percent the previous week and the five-year average of 20 percent. USDA said the winter wheat harvest was 94 percent complete.
USDA also said 67 percent of the US spring wheat crop was in good to excellent condition, down from 68 percent the previous week. The North Dakota state report said scab, a fungal disease, continued to show up with varied levels of severity in spring wheat and barley fields.
Position-squaring continued ahead of the US Department of Agriculture's August supply/demand report, scheduled for release Friday morning.
The average US all-wheat production estimate from analysts surveyed by Reuters was 2.178 billion bushels, down from USDA's July estimate for 2.208 billion.
The average trade estimate for US spring wheat production was 560 million bushels, down from USA's 589 million in July - underscoring the impact of scab and wet weather on the crop.
The nine-day relative strength index for CBOT September wheat closed on Tuesday at 34. Technical traders consider an RSI of 30 or lower as one sign of an oversold market, while an RSI of 70 or higher signals an overbought market.
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