Spring wheat futures at the Minneapolis Grain Exchange closed higher on Tuesday, rebounding along with the Kansas City and Chicago markets after on Monday's steep declines, traders said.
Trade was light, and a lack of sell paper added to the firm tone. "We're higher due to a lack of selling," one floor trader said. MGE May wheat settled 3-3/4 cents higher at $4.03-1/2 per bushel, with deferred months up 2 to 5 cents. Volume was light, estimated by the exchange at 3,786 contracts, down from 4,743 on Monday.
UBS Warburg bought 200 May contracts while ADM Investor Services bought 200 May and 100 July and sold 100 May and 100 July, traders said. Prudential sold 100 May and 100 September, they said. Strength in the Kansas City Board of Trade wheat market was supportive, with July settling 5-1/2 cents higher at $4.20-1/4. Weather in the US Plains and Midwest winter wheat regions remained the focus.
Both areas received significant precipitation over the past couple of days, driving wheat futures lower on Monday. MGE May wheat closed below $4 on Monday for the first time since February 15. The moisture arrived too late to have much impact on weekly crop condition ratings in the southern Plains. State reports issued by the US Agriculture Department late on Monday showed weekly wheat ratings fell in Kansas, with 24 percent of the HRW crop rated good to excellent, down from 29 percent a week. In Oklahoma, 70 percent of the crop was rated poor to very poor, although topsoil moisture improved.
Overnight exports were routine, with South Korea tendering to buy 9,200 tonnes of US wheat. Export sources also noted talk that Iraq was seeking US hard red winter wheat, although no business was confirmed.
The nine-day relative strength index for MGE May wheat stood at 32 ahead of the open and closed at 38. Technical traders consider an RSI of 30 or lower as one indication of an oversold market.
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