US wheat futures rose on Tuesday, with the benchmark Chicago Board of Trade front-month contract notching its biggest gain in more than a month, as traders covered short positions with prices hovering near six-month lows. News that Iraq bought 500,000 tonnes of wheat, including 50,000 tonnes US HRW wheat lent support to prices.
CBOT May soft red winter wheat settled up 10 cents at $4.63-1/2 per bushel, a gain of 2.2 percent. In percentage terms, it was the nearby CBOT contract's biggest gain since a 2.3 percent rally on March 3 Funds bought 4,000 to 5,000 lots. At the Kansas City Board of Trade, May hard red winter wheat was up 9-3/4 cents at $4.81-1/2 a bushel. Minneapolis Grain Exchange May spring wheat up 8 cents at $4.97-1/2 bushel. Managed funds hold a massive net short in CBOT wheat, leaving market open to periodic bouts of short-covering despite bearish fundamental picture.
Market shrugs off pressure from strong condition ratings for the US winter wheat crop released by USDA late Monday. USDA said 65 percent of US winter wheat rated good to excellent, versus 43 percent a year ago. Rain tempts Australian farmers to plant more wheat. Winds and dryness increase stress on HRW wheat in the US Southwest over the next couple of days but overall good weather continues in the US winter wheat areas. US CIF Gulf wheat basis flat.