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CBOT wheat jumps to 3 month high on exports, funds

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed strongly higher on Thursday on aggressive fund buying tied to technical buy stops and on a brighter export picture, traders said.

CBOT wheat closed 3 to 6-3/4 cents per bushel higher, with March up 6-1/4 at $2.71-3/4.

The session high for March at $2.73 is the highest level for that month since $2.76-1/4 was notched on Nov. 9.

"Wheat was boosted by two things including signs the government may be getting a little more aggressive on exports and giveaways and on forecasts for dry weather in the Plains," said Don Roose, analyst for US Commodities, Des Moines, Iowa. The US Agriculture Department's weekly export sales report, released Thursday, listed net US wheat sales for the week ended Feb. 3 at 684,400 tonnes, 21 percent above the previous week and more than twice the four-week average. Expectations ranged from 200,000 to 400,000 tonnes.

Among the top buyers listed by the USDA was Egypt, at 115,500 tonnes. Earlier this week, Egypt bought 105,000 tonnes of US wheat. Also the prospects of another US food aid package suggest that more US wheat may be moving overseas, traders noted. On Wednesday, USDA Secretary Dan Glickman said at an industry conference in Las Vegas that wheat producers "will be pleased" with the amount of wheat included in a new food assistance programme to be announced within the next few days.

Last year, the US shipped 8 million tonnes of wheat and other commodities in food aid, an amount that Glickman called a "high-water mark."

Wheat futures also found support from a dry outlook for the US Plains winter wheat belt.

The latest 6-to-10-day outlook from the National Weather Service forecast above-normal to much above-normal temperatures and no precipitation for Kansas, Oklahoma and north Texas for Feb. 15-19.

Those areas comprise the heart of the hard red winter wheat belt, which has suffered from below-normal precipitation since the seeding season last fall.

O'Connor & Co. bought 300 March contracts and FIMAT Futures Inc. sold 1,000 March shortly before the close, traders said. Up to late trading, Goldenberg Hehmeyer bought 1,500 March, E.D. & F. Man International bought 700 March and 1,500 July, RJ O'Brien & Associates bought 300 March and 1,000 July and Prudential Securities sold 1,400 December, traders said.

The fund buying in wheat totalled at least 6,000 lots.

CBOT wheat futures volume was estimated by the CBOT at 44,000 lots, above the 36,352 lots traded Wednesday.

Wheat options volume was estimated at 8,000 lots.-Reuters