CBOT wheat futures higher on fund buying

Wheat futures at the Chicago Board of Trade closed higher on Wednesday as fund buying helped the market recover from a sharp decline, traders said. CBOT wheat closed 2 cents per bushel higher to 1/2 lower. September was up 2 at $3.30-1/2 per bushel.
Volume was on the lighter side estimated at 20,793 futures and 3,593 options. That compared to Tuesday's trade of 27,068 futures.
Some underpinning, especially in the Minneapolis Grain Exchange spring wheat futures market, may be coming from reports a crop tour was citing about average yields in key state North Dakota. Traders said the wheat futures market has pencilled in average to above average yields.
The crop scouts were expected to release a final spring wheat production estimate on Thursday.
Inspections of 13 hard red spring and durum wheat fields in north-west North Dakota showed lower yield potential than crops in the same area last year, the crop scouts said on Wednesday.
Head scab, a fungal disease, was the main reason for the lower projected yields, they said.
"It would have paid the farmers this year to put a fungicide application on," said Ben Handcock, executive vice president of the Wheat Quality Council, which organised the three-day tour.
"I never saw three fields in a row that bad. I have seen worse, but not for a long time," Handcock said.
The export arena overnight failed to generate any bullish enthusiasm for wheat futures. Japan purchased 16,280 tonnes of feed wheat, Syria said it had sold 50,000 tonnes of wheat and South Korea bought 21,600 tonnes of US wheat.
And another reminder of the competitive posture of Black Sea wheat surfaced on Wednesday. Traders in Singapore said Malaysian feed mills were attempting to buy feed wheat from the Black Sea amid dropping freight rates and aggressive offers.
Cash basis bids for SRW in the Midwest were mostly steady, although the wheat basis continued to firm at Morris, Illinois.
Technical support in the September contract was at $3.26-1/2 per bushel and resistance was at $3.33-1/2. The nine-day relative strength index for September closed Tuesday at 44. Technical traders view an RSI of 30 or less as an oversold market and 70 or more as an overbought market.