Soft red winter wheat futures at the Chicago Board of Trade closed higher on Wednesday amid worries that US winter wheat may be damaged by harsh weather, traders said.
CBOT wheat closed 2 to 6-1/2 cents per bushel higher, with July up 3-1/2 at $3.81-1/2.
Volume was modest, estimated at 26,475 futures and 4,421 options.
"Our weather forecaster is a little drier in the Great Plains today than he was yesterday," said Dale Gustafson, analyst for Citigroup.
Dry weather in the far western Plains HRW wheat area is expected to trim yield prospects. And excessive rains in SRW wheat areas of the eastern Midwest were leading to concerns about fungal diseases like scab and powdery mildew. Much of the winter wheat crop is in its critical heading and flowering stage of development, leaving it vulnerable to weather damage.
Exports were routine overnight but the market is hoping for sales of wheat to Pakistan and Jordan. Jordan tenders on June 2 for 150,000 tonnes of optional-origin wheat and has GSM credits available.
Chicago wheat also gained on corn as SRW wheat prices approached feed values after recent weakness in wheat futures, traders said.
But gains were limited by a reminder of another rebound in Australia's wheat production prospects. Australia's national wheat exporter, AWB, forecast this year's wheat crop at 21 million to 24 million tonnes, down from last season's record 25.2 million but more than double the drought-affected 9.7 million tonnes in 2002/03.
US cash basis markets were holding steady at mid-week and country movement was light. Pit sources said there were signs of commercial demand for wheat by Cargill Inc.
Technical support in the July contract was at $3.65-1/4 per bushel and resistance was at $3.82-3/4. The nine-day relative strength index for July stood at 56 prior to the open on Wednesday. Chartists view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.
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