US wheat futures closed higher on Tuesday as the unwinding of corn/wheat spreads spurred a late rally and pushed the market into positive territory, traders said. Ideas of increased demand for wheat as a livestock feed also supported the market.
Recent weakness in wheat prices had pushed the nine-day relative strength index to 39 ahead of the open, nearing the technically oversold range of 0 to 30. Chicago Board of Trade December soft red winter wheat rose 3-1/4 cents to close at $5.23-1/4 a bushel. Deferreds were 2-1/2 to 5 cents higher.
Kansas City Board of Trade December hard red winter wheat ended 8 cents higher at $5.71 a bushel. Deferreds were 6 to 12 cents higher. Minneapolis Grain Exchange December spring wheat settled 4-1/2 cents higher at $6.44-1/2 a bushel. Deferreds were 4 to 9 cents higher. Funds bought 1,000 lots of CBOT wheat. Fortis a late buyer of 500 March contracts.
Active spreading boosted CBOT volume as funds rolled December positions forward; CBOT December/March wheat spread traded more than 25,000 times electronically. KCBT wheat volume was estimated at 21,012 futures; MGE at 2,995 futures. "Broken" CBOT wheat contract stays under fire.
Japan offered to buy 100,000 tonnes of US food wheat. Japan changed the terms of its tender and could, as a result, buy US wheat this week for the first time in two months -US wheat traders. USDA said 94 percent of US winter wheat was planted by Sunday, equal to the five-year average. The crop was 83 percent emerged.
US winter wheat condition was rated 68 percent good to excellent, up from 67 percent a week ago and up from 49 percent a year ago. Australia's wheat crop may reach the world market slowly as a rail car shortage stymies deliveries from eastern farmers to ports. Rainfall in the last day and warming temperatures favour pre-winter growth of US Plains winter wheat crop. CME Group to lower CBOT margins on wheat.