Wheat futures at the Chicago Board of Trade closed firm on Tuesday, ending a choppy session on ideas the market was oversold and due for a bounce, traders said.
Outlooks for drier weather in parts of the US Plains this week were supportive. But pressure from improved weekly crop ratings for US winter wheat states weighed on prices throughout the day.
A midmorning technical problem at the CBOT halted trade for about 40 minutes. Because trade was thin at the time, brokers reported only minor disruptions. Trade resumed at 11:20 am CDT (1620 GMT).
CBOT May wheat settled 3/4 cent higher at $3.42-3/4 per bushel, with deferred months up 1 to 3 cents.
Funds were nearly even on the day. ADM Investor Services and ABN Amro were late buyers, lifting prices on the close, traders said.
Volume was light, estimated by the exchange at 33,311 futures and 2,920 options.
Wheat futures have fallen sharply since mid-March as welcome rains in the US Plains have eased traders' concerns about drought. State crop reports late Monday by the US Agriculture Department confirmed improvement in key winter wheat states.
In Kansas, the top US wheat state, 38 percent of the crop was rated in good to excellent condition, up from 26 percent last week. Ratings improved in other Plains states as well.
In the Midwest, the Illinois soft red winter wheat crop was rated 76 percent good to excellent, up from 67 percent a week earlier.
The government's first US crop condition report of the season showed a decline in wheat ratings from a year ago. The USDA said 38 percent of the US winter wheat was rated good to excellent, down from 68 percent a year earlier.
Mostly dry conditions were forecast this week in western portions of the US Plains HRW belt that are most in need of moisture, Meteorlogix said. There was a chance of light rain across central Texas, Oklahoma and Kansas at midweek, and the northern areas were also likely to see some rain.
Ideas that CBOT wheat futures were oversold underpinned the market. The nine-day relative strength index for the May contract stood at 34 ahead of the open and closed at the same level. Technical traders consider a reading of 30 or lower as an oversold signal.
May wheat remained below all key moving averages. Key resistance held at the 100-day moving average of $3.48-1/2.
Export activity included news from European traders that Jordan was expected to issue a tender for about 100,000 tonnes of US wheat in May.
Japan will hold its first regular tender to purchase wheat for fiscal 2006/07 next week.
Ukrainian consultant UkrAgroConsult raised its 2006 wheat harvest outlook by 3.4 percent to 10.92 million tonnes, from 10.56 million a month ago.
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