Chicago Board of Trade wheat futures closed higher Tuesday on bargain buying and fund short-covering after last week's multi-year lows, traders said. Commodity funds hold a large net short position in CBOT wheat futures, leaving the market vulnerable to bouts of short-covering. CBOT September wheat settled up 8 cents at $4.38-1/2 per bushel. K.C. hard red winter wheat and MGEX spring wheat futures also closed higher, but trailed the gains in CBOT wheat.
The US Department of Agriculture in monthly supply/demand reports raised its estimate of US 2016 all-wheat production to 2.261 million bushels, toward the high end of a range of trade estimates. Reflecting rising global use of wheat for livestock feed, the USDA cut its forecast of world 2016/17 wheat ending stocks to 253.7 million tonnes, down from 257.8 million in June and below the lowest in a range of trade expectations.