Kansas City Board of Trade wheat futures settled higher on Thursday thanks to a late short-covering rally ahead of the extended holiday weekend, traders said. The market closed 1 cent to 3-3/4 cents higher, with the March at $3.38, up 3-1/2 cents. March ranged from $3.33 to $3.38 in the abbreviated session. Prices traded both sides during the session, burdened by bearish export news and volatile in mostly thin volume until short-covering kicked in during the waning minutes.

Locals drove the late action, covering short positions with limited sell paper seen.

Fimat USA bought 800 March and sold 300 March, Cargill Investor Services bought 300 March and sold 500 March, FC Stone sold 300 March, Man Financial sold 300 March, Prudential sold 200 March, Refco bought 250 March and sold 300 March, Shay Grain traded 200 March, and UBS bought 300 March, pit sources said.

Also, UBS spread 500 March/May at 5-1/2 cents.

The market closed early, at noon CST, for the New Year's holiday this weekend. Markets will be closed all day Friday.

Overall trade was quiet early Thursday. Some spreading was noted, with players buying Kansas City wheat and selling wheat futures at the Chicago Board of Trade, traders said.

Export news was mostly neutral to bearish. State-run Trading Corporation of Pakistan purchased 250,000 tonnes of wheat from the Australian Wheat Board and 150,000 tonnes from the Canadian Wheat Board. US prices were too high, according to the TCP.

The United States did get some business from Egypt, but it was less than half of the total tender by Egypt's General Authority for Supply Commodities.

Copyright Reuters, 2005