Wheat futures on the Chicago Board of Trade rose on Friday for a second straight session on bargain buying and fund short-covering, following a mid-week drop to multi-year lows, traders said. K.C. hard red winter wheat and MGEX spring wheat futures also closed higher. Funds hold a large net short position in CBOT and K.C. wheat, leaving the market vulnerable to short-covering rallies.
Open interest in CBOT wheat futures dropped by nearly 11,000 contracts after Thursday's 2 percent rally, one indication that traders were exiting short positions. The US dollar's plunge on Thursday appeared to ignite the short-covering rally, traders said. Wheat's climb continued on Friday despite a slight rebound in the dollar index.
Statistics Canada raised its estimate of Canada's all-wheat production to 27.6 million tonnes, up from its October estimate of 26.1 million and above the average trade expectation of 26.7 million. Recent precipitation improved the condition of Ukrainian winter grain crops, primarily wheat, which were hit by drought this autumn, the Agriculture Ministry said.
CBOT reported 226 December soft red wheat deliveries, with the Term Commodities house account stopping 39 lots. K.C. wheat deliveries totaled 20 contracts and MGEX reported 33 spring wheat deliveries. For the week, CBOT March wheat rose 5-1/2 cents per bushel or 1.1 percent. K.C. March wheat rose 14 cents or 3 percent and MGEX March spring what rose 9 cents or 1.8 percent.
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