US wheat futures rallied on Friday, rising more than 3 percent on the Chicago Board of Trade as the US government's rescue plan for the financial sector buoyed sentiment in commodities, traders said. Most commodities rose as the government initiatives eased fears of more liquidation by financial institutions scrambling to raise capital.
Wheat was also seen as oversold after prices at all three US futures markets hit one-year lows this week. At the CBOT, December soft red winter wheat rose 25-1/4 cents, 3.64 percent, to settle at $7.18 per bushel; March up 25 cents at $7.37-3/4.
Commodity funds were net buyers of 3,000 CBOT wheat contracts, traders said. At the Kansas City Board of Trade, December hard red winter wheat settled up 22-1/4 cents, 3 percent, at $7.56-1/2 a bushel; March up 21-3/4 at $7.75-1/2. At the Minneapolis Grain Exchange, December spring wheat ended up 21 cents, 2.7 percent, at $7.85 a bushel; March up 19-1/2 at $7.98.
Argentina's wheat output could fall 25 percent due to a prolonged drought that is reducing yield potential - Buenos Aires Grains Exchange. Australian wheat in the jointing to reproductive stages will need rain during the next few weeks to prevent reductions in yield forecasts. Hungary's 2008 wheat crop up 42 percent year/year. CBOT December contract stayed below all key moving averages but its nine-day RSI climbed to 41, rising above the oversold technical range of 0 to 30.
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