US wheat futures closed narrowly mixed on Tuesday, supported by technical buying and short-covering while corn, soybeans and most other commodities posted sharp declines, traders said.
"The wheat is oversold. We've taken some pretty good value out of the market ... over the last week, week and a half. The oversold ideas brought some fresh buying into the market," said Shawn McCambridge with Prudential Financial. Large speculators remain net short in CBOT wheat, leaving the market open to bouts of short-covering. Traders also were buying wheat to exit inter-market spreads, including long corn/short wheat positions and long Kansas City/short Chicago positions.
In another bullish development, Australian Crop Forecasters cut its forecast for Australia's 2008/09 wheat crop to 23.5 million tonnes after disappointing June rains.
At the Chicago Board of Trade, July soft red winter wheat settled 1-1/4 cents higher at $8.23-1/4 per bushel, with most-active September up 1/2 cent at $8.36-1/2. Back months were up 1-1/4 cents to down 2-1/2. Commodity funds were net sellers of 1,000 CBOT wheat contracts, traders said. CBOT wheat volume was estimated at 82,627 futures and 15,459 options.
At the Kansas City Board of Trade, July hard red winter wheat ended down 1 cent at $8.49 a bushel, with bellwether September up 1-1/4 cents at $8.61-1/4. Back months were up 3 cents to down 5 cents. KCBT volume was estimated at 15,683 contracts.
At the Minneapolis Grain Exchange, July spring wheat settled 9 cents lower at $9.81 a bushel, with most-active September up 1/4 cent at $8.85. Back months were up 1 cent to down 7. MGE volume was estimated at 4,693 contracts.
After the close, Egypt issued a snap tender for 55,000 to 60,000 tonnes of optional-origin wheat for shipment August 5-15. Tender results were expected on Wednesday. US wheat was seen as too expensive to win business, trader said. Showers across the US southern and central Plains were causing some minor disruptions to the wheat harvest; improved weather seen later this week.
USDA late Monday said the US winter wheat harvest was 52 percent complete, up from 36 percent a week earlier but behind the five-year average of 61 percent. Jordan bought 50,000 tonnes of Black Sea wheat for first-half September shipment; Tunisia tendered to buy 67,000 tonnes of soft wheat and 67,000 tonnes of durum wheat from optional origins. The supplement to the CFTC's reports showed large speculators cut their net short position in CBOT wheat to 19,790 contracts in the week ended July 1, down 3,500 lots. Deliveries on CBOT July at 145 lots; KCBT deliveries at 149 contracts; no deliveries for MGE.