Spring wheat futures at the Minneapolis Grain Exchange closed higher in thin volume on Tuesday, rallying from declines as Chicago Board of Trade corn and wheat climbed, traders said. July spring wheat settled 2-1/2 cents higher at $5.23-3/4 per bushel, with September up 3-1/2 at $5.22 and December up 2-1/4 at $5.28.
Volume was light, estimated by the exchange at 2,996 contracts. The session, UBS Warburg sold 500 December contracts, traders said. At the CBOT, July wheat settled up 5-1/2 cents at $5.02 and July corn ended up 8-1/4 cents at $3.71-1/2. Concerns about dry weather creeping into the eastern US Midwest crop belt were supportive to those markets.
Also bullish were worries about drought in China's wheat belt. Chinese state media said a spring drought is intensifying across north China, including Henna province, the country's breadbasket, where rainfall since March has been down 70 percent on the average for the last two years.
A wheat shortfall in China could further tighten world wheat stocks. The US Department of Agriculture last week projected global wheat ending stocks for 2007/08 at 113.3 million tonnes, a 26-year low.
Spring wheat futures were under pressure in the session after the US Department of Agriculture reported aggressive spring wheat planting progress by US farmers last week. USDA said 87 percent of the US spring wheat crop was seeded on Sunday, ahead of the five-year average of 74 percent.
In its first spring wheat condition ratings of the season, USDA said 79 percent of the crop was in good to excellent condition. On the export front, Japan said it would seek 130,000 tonnes of Canadian Australian and US wheat at its weekly tender.
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