Spring wheat futures on the Minneapolis Grain Exchange settled higher on Tuesday, lifted by spillover strength from outside wheat markets, traders said.
MGE December wheat closed up 3-1/2 cents at $3.72 per bushel, with deferred months up 4 to 7-1/2 cents.
Light fund buying supported values as well. Funds bought about 500 contracts on the day, a floor source said.
Volume was estimated by the exchange at 3,714 contracts, up from 2,856 on Monday.
The December/March spread traded between 5-1/2 and 6-1/2 cents.
The Chicago and Kansas City markets set the firm tone in wheat futures, rebounding from Monday's declines and buoyed by a drop in US winter wheat condition ratings.
The US Department of Agriculture late Monday said 57 percent of the US winter wheat crop was rated in good to excellent condition, down from 61 percent the previous week.
Lackluster export business overnight and reminders of global competition limited upward momentum.
Private group Australian Wheat Forecasters raised its forecast for Australia's new wheat crop to 24.52 million tonnes, from its previous estimate of 23.97 million. The group said above-average rainfall has improved yield prospects.
Traders were squaring positions ahead of the release on Thursday of USDA's November crop production and supply/demand reports. The average estimate for US 2005/06 wheat ending stocks among analysts surveyed by Reuters was 537 million bushels, above USDA's October forecast for 530 million.