Wheat rebounded from the lowest price in more than three months amid speculation the longest slump in 15 years may spur demand and as recent rainfall failed to improve the crop’s condition in the U.S.
Wheat’s relative strength index, a gauge of price momentum, fell to 22.1 yesterday, the lowest since Jan. 10. The index rose to 25.3 today, with values below 30 considered by some traders to indicate an oversold situation.
"There would be opportunistic buyers at this level," Vyanne Lai, an agribusiness economist at National Australia Bank Ltd., said by telephone from Melbourne. "Planting progress and weather conditions in the U.S. are relatively positive. Planting is on track and so it assuages fears of tightness in supply."
Wheat futures for July delivery rose 0.5 percent to $6.155 a bushel at 11:19 a.m. on the Chicago Board of Trade after earlier slipping to $6.1075, the lowest for a most active- contract since Feb. 28. Yesterday, the price fell for the 10th straight session, the longest slump since Sept. 1, 1998.
The price drop for wheat "has made the market look oversold based on RSI," Paris-based farm adviser Agritel said in a report. "In this context, a technical rebound could happen at any moment."
About 30 percent of U.S. winter wheat was in good or excellent condition as of June 1, unchanged from a week earlier, the U.S. Department of Agriculture said June 2. Parts of Texas, Oklahoma and Kansas received above-normal rain in the two weeks through June 3, data from World Ag Weather show.
Planting of U.S. spring wheat was 88 percent complete from 74 percent in the previous week, the USDA reported. Showers later this week in central and northern areas of the Plains wheat belt will replenish moisture, MDA Information Systems LLC said yesterday in a report.
Corn futures for July delivery dropped 0.5 percent to $4.5575 a bushel after earlier touching $4.5525, the lowest since Feb. 28.
Soybean futures for July delivery rose 0.3 percent to $14.8625 a bushel.