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CBOT wheat closes firm on technical rebound

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed firm on Wednesday on commodity fund buying tied to a technical rebound.

CBOT wheat closed 1/4 to 3/4 cent higher, with March up 3/4 at $2.47-3/4. May closed 3/4 higher at $2.59-3/4.

Most contract months opened lower Wednesday but turned firm as funds ventured into the market.

Traders said the market was supported by technicals showing oversold signals. Lingering support came from China's purchase of US wheat from the Pacific Northwest on Monday that has raised hopes for more exports.

But US Wheat Associates said on Wednesday it could not confirm rumours of an additional wheat sale to China.

"We can't find anybody who thinks there has been an additional sale," said Dawn Forsythe, a spokeswoman for the wheat market development group, which sponsored a recent visit of Chinese grain buyers to the United States.

China has shunned wheat purchases from the Pacific Northwest for more than two decades because of a sour-smelling grain fungus known as TCK smut.

On Monday it ended that boycott with a purchase of 50,000 tonnes -- the first under an new agreement establishing TCK smut tolerance levels for Pacific Northwest wheat shipments. The early dip Wednesday in wheat futures was pegged to big deliveries against the March contract and improved crop weather in the US winter wheat belt.

The delivery tally on the March contract Wednesday was at 3,178 lots and found scattered stopping, which indicated a lack of urgency in obtaining the abundant wheat supplies.

There were also forecasts for crop-friendly rainfall soon in the US Great Plains. Meteorologists cited substantial rainfall Thursday and again Tuesday in the Plains states hard red winter wheat growing region.

Both SRW and HRW wheat basis values were steady, buoyed by 2-cent gains in futures markets, slow country movement and hopes of more bookings by China, which bought US wheat this week.

Recent moisture in the US Plains has helped new crop prospects. But many dry spots remain, which could feed speculation that prices will rally in the spring. That would discourage farmer selling now.

Chart watchers Wednesday were eyeing support in the May contract at $2.57 and resistance at $2.61. May closed at $2.59-3/4.

FIMAT Futures bought 500 May, sold 400 May and bought 200 July. Rand Financial bought 200 May and Refco Inc. sold 500 May. Cargill Inc. sold 1,200 July $2.00 puts.

CBOT wheat futures volume was estimated by the CBOT at 33,000 lots, below the 36,402 lots traded Tuesday.

Wheat options volume was estimated at 5,000 lots.-Reuters