Minneapolis Grain Exchange spring wheat futures closed mostly higher on Tuesday on a modest rebound following last week's drop too contract lows, traders said. "Fundamentally, things still look pretty negative, (but) a little bit of fund short covering is helping us out," one trader said.
Most-active MGE March closed up 1/2 cent at $3.40-3/4 per bushel after climbing early to the day's high at $3.43.
New crop September and December closed 1/2 cent lower.
The March/May spread last traded at an inverse of 8-1/2 cents.
Outright volume was estimated by the exchange at 5,363 contracts, up from 2,786 lots on Monday.
Traders said funds were net buyers of about 500 contracts on the day.
The latest CFTC Commitments of Traders report showed that large speculators remain heavily net short in MGE wheat, leaving the market open to short-covering rallies.
However, there was little fundamental news and nothing in the export market overnight to add bullish enthusiasm. Traders said plentiful world stocks of wheat and lackluster export business continue to weigh on the wheat market, limiting rallies.
Canadian grain traders expect Statistics Canada on Wednesday to confirm a glut of grain and oilseed supplies. Traders' average estimate for Canadian all-wheat stocks was 20.4 million tonnes, up from 17.9 million tonnes a year ago.
Traders estimated Canadian durum stocks at 4.3 million to 4.8 million tonnes, compared with 3.9 million tonnes at December 31, 2003.
The nine-day relative strength index for MGE March wheat closed at 46, in a neutral area above the threshold of 30 that chartists consider oversold and below the overbought threshold of 70.
Traders estimated support in March at $3.34 and $3.28 per bushel, and resistance at $3.48 and $3.51.