Chicago Board of Trade wheat futures closed firm on Friday in a technical recovery from the recent slide to fresh eight-month lows, traders said.
The nine-day relative strength index for July closed Thursday at 15, well below the benchmark 30 chartists view as an oversold market. That fact encouraged a bit of small-lot short-covering before the long holiday weekend. Markets will be closed on Monday for the US Independence Day holiday.
CBOT wheat closed 1-1/2 to 4-1/2 cents per bushel higher, with July up 4-1/2 at $3.35. September was 3 cents higher at $3.41-1/2.
Futures volume was light, estimated at 20,880 lots. Options trade was pegged at 6,333 contracts.
Traders said wheat futures were trying to consolidate at the current lower levels. The market has been dropping to eight-month lows on chart-based fund sales, seasonal harvest pressure and scant demand.
Some support also stemmed from short-covering ahead of the long holiday weekend. A weaker dollar also was supportive to wheat futures prices.
Exports were routine overnight, with South Korea buying 25,000 tonnes of US wheat. Cash basis for SRW wheat in the Midwest was steady as harvest moved into central and northern parts of Ohio and Indiana. Traders had little reaction to trade reports that Memphis-based analytical firm Sparks Cos. forecast US 2004 wheat production at 2.058 billion bushels. The traders said everyone was waiting for the July 12 release of updated USDA crop estimates.