Wheat futures on the Chicago Board of Trade closed higher Thursday on technical buying and concerns about dry conditions in the US Plains as the hard red winter wheat crop exits dormancy, traders said. Benchmark CBOT May wheat traded lower overnight but turned up after the contract failed to push below the week's low of $6.87 per bushel, bottoming at $6.92. The contract rallied to settle at $7.10-1/2.
Analysts said commodity funds were defending long positions established since CBOT front-month wheat hit a 3-1/2 year low of $5.50 a bushel in late January. The weekly US Drought Monitor report said severe or worse drought expanded over the last week in Kansas, the top US wheat state, while "extreme drought" expanded in Oklahoma.
Rain was expected next week in the central and eastern US Plains but the showers should miss the driest areas, including Texas and western Oklahoma. The London-based International Grains Council raised its forecast for 2014/15 global wheat production to 700 million tonnes, up 4 million from last month, but below the prior season's 709 million.