In other featured markets, coffee futures advanced on bargain hunting and purchases ahead of the US Independence Day holiday on July 4, while industry buying helped cocoa recover from Monday's decline to seven-week lows.

At the New York Mercantile Exchange, crude oil futures rose above $32 per barrel on the coattails of a rally in heating oil futures, which in turn were lifted by concerns that US stocks will be low next winter.

Heating oil was also lifted by strong natural gas prices buoyed by increased demand for cooling in the summer heat.

Gasoline futures rose ahead of the release of the closely watched weekly inventory report from the American Petroleum Institute.

Crude oil for delivery in August settled at $32.06 a barrel, up 43 cents. July heating oil ended at 81.88 cents a gallon, up 1.80 cents. July gasoline finished at $1.0652 a gallon, up 1.35 cents, after surging to a session high of $1.075.

Forecasters had expected a modest decline of 1.35 million barrels in US gasoline stocks last week, according to a Reuters poll. After the close of trading, the institute reported that gasoline stocks rose by 1.8 million barrels.

Traders and analysts had forecast a modest 1.15 million barrel increase in crude stocks and an increase of 1.2 million barrels in distillate stocks, which include heating oil. The report said crude stocks rose by 2.3 million barrels while distillates rose by only 351,000 barrels.

Crude oil futures weakened early after Opec President Ali Rodriguez said the cartel was watching market conditions to decide if another oil production increase was necessary to soften prices.

Crude prices have stayed high despite Opec's decision last week to raise output by 708,000 barrels per day starting July 1. The markets are also watching Kuwait, which is seeking buyers for crude oil that has been backed up because of an explosion at its largest refinery on Sunday.

Kuwait has declared force majeure on all its products after the explosion forced the shutdown of Mina al-Ahmadi refinery, which was running at around 450,000 barrels per day.

Kuwait said on Tuesday it could take six months to repair damage to the refinery.

At the Chicago Board of Trade, wheat futures gave up early gains to end lower as traders began to discount earlier concerns that a steady dose of rain could spark quality problems in the crop.

Substantial, steady rainfall in key wheat growing areas had raised concerns over quality and buoyed the market.

July delivery wheat ended 1/4 cent lower at $2.73-3/4 per bushel.

The US Department of Agriculture said in its weekly crop progress report on Monday that 45 per cent of the US wheat crop was in good to excellent shape, down slightly from 46 per cent a week ago and well below the 66 per cent average of a year ago.Corn futures rose partly on talk that weather in the main midwest growing area could turn hotter next week with the emergence of a high-pressure ridge.The corn crop, heading into the critical pollination or reproductive development stage, is currently enjoying almost ideal growing conditions.

July delivery corn ended 2-1/2 cents higher at $1.96-3/4.

At the New York Board of Trade, bargain hunting and purchases ahead of the Independence Day holiday helped coffee finish higher. July delivery coffee futures closed 1.35 cents higher at 88.50 cents per pound.

At the same exchange, cocoa ended higher on industry buying and interest from commercial houses. July delivery cocoa gained $8 to $808 per tonne.