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CBOT wheat closes lower on wetter Plains outlook

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed lower on Tuesday, pressured by improved moisture prospects for the U.S. Plains and reminders of large supplies worldwide.

CBOT wheat closed 1/2 to 3-3/4 cents lower, with March down 2-3/4 at $2.66.

"Apparently there's a little more rain coming into the Plains and I think that took us down a little, but it was pretty quiet," a trader said.

Meteorologists said modest moisture relief could arrive in Kansas and other Plains states by the end of this week. Weather Services Corp. projected 1/4 to 1 inch of precipitation across Kansas on Wednesday and Thursday, with the eastern part of the state likely to receive the most.

The latest 6-to-10-day outlook from the National Weather Service projected above-normal temperatures and precipitation for Feb. 20-24 in Kansas, the top U.S. wheat growing state. Winter wheat acreage has suffered from below-normal precipitation since it was planted last fall.

Worldwide, large crops in major producing nations have built an abundant supply of wheat. Earlier Tuesday, the Australian Bureau of Agricultural and Resource Economics raised its estimate of Australia's 1999/2000 wheat production to a record 24.1 million tonnes, from a previous forecast of 22.8 million tonnes issued in December. The crop would top the previous record of 23.7 million tonnes in 1996/97. The U.S. Department of Agriculture estimated Australia's 1999/2000 wheat crop at 23.5 million tonnes.

The latest commitments of traders reports from the Commodity Futures Trading Commission indicated that speculative commodity funds slightly increased a net long position in CBOT wheat futures and options recently, traders said.

The CFTC said that as of Feb. 8, noncommercial interests, which are primarily funds, held 22,441 long wheat futures and options contracts and 20,829 shorts, for a net long of 1,612 contracts. As of Feb. 1, the net noncommercial long was 1,265.

Near the close, FIMAT Futures Inc. sold 400 March contracts, traders said. E.D. & F. Man International sold 300 July contracts, Merrill Lynch bought 300 July and Cargill Inc. bought 200 March, floor sources said.

The CBOT estimated wheat futures volume at 28,000 lots, above the 22,840 lots traded Monday. Wheat options volume was estimated at 4,500 lots.-Reuters