By Tony C. Dreibus Sept. 17 (Bloomberg) -- Wheat may rebound from a two-year low on speculation that prices have fallen enough to encourage hedge funds to close short positions that are the highest since 2005, said Derek Lewis, a trader at ClearTrade Commodities. The decline on Sept. 15 to $4.50 a bushel on the Chicago Board of Trade, the lowest price since April 2007, was a technical indicator that the slump has bottomed, Lewis said. An analysis of historical price trends suggests the grain may rise above its 18-day moving average of $4.80 before reaching resistance at $5.18, he said. “I’d like to see wheat take out the 18-day moving average and then most above last month’s lows,” Lewis said from Chicago. “It’s all technical. There’s nothing on the demand side. Right now I don’t see anything supportive above $5.18.” Net-short positions, or bets prices will fall, outnumbered long positions on the CBOT by 37,955 contracts in the seven days that ended Sept. 8, up 1 percent from a week earlier and the most since Dec. 9, 2005, data from the U.S. Commodity Futures Trading Commission show. Before today, wheat plunged 32 percent in the past year as production jumped and the recession slowed demand. Wheat futures for December delivery slipped 0.7 percent to $4.6725 a bushel yesterday on the CBOT.

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