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CBOT wheat ends up as soyabeans rally, local buying

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher on a rally in soyabeans with late local buying, tied to short covering, buoying prices to the day's highs near the close.

CBOT wheat closed 1/2 to 3 cents per bushel higher, with March up 2-1/4 at $2.64-3/4.

Gains were limited by hints of possible improving crop weather in the key US Great Plains hard red winter wheat producing region.

About a quarter to an inch fell in eastern Oklahoma and Kansas over the past 24 hours, Weather Services Corp. said. One to 3 inches of snow in other areas was expected to result in one-tenth to one-quarter inch of melted precipitation for the rest of Kansas, Nebraska and Colorado.

Lingering light precipitation was expected Friday before conditions turn dry over the weekend, Weather Services said.

While any precipitation would be welcomed by wheat farmers, the amounts this week likely won't be enough to significantly alleviate persistent dryness in key wheat areas, including western and north central Kansas, Weather Services said.

Wheat futures were expected to remain burdened by lackluster US exports. Overnight export activity was fairly light. Traders said the Taiwan Flour Mills Association will reopen a tender on Tuesday for 67,200 tonnes of US wheat after cancelling purchases due to high freight rates in a Jan. 27 tender.

The technical posture of CBOT wheat has weakened as prices eroded this week, traders said. March CBOT wheat ended Thursday at $2.62-1/2, the contract's lowest settlement since Feb. 8, and may be poised for a decline to $2.56, Chicago trading firm R.J. O'Brien & Associates said in a report Friday.

"The studies are turning lower from relatively overbought, which will reinforce the downside," the firm said. "It would take a close above $2.68 to alter the defensive posture."

Local traders bought back short positions in late trading. Up to late trading, E.D. & F. Man International sold 200 September contracts and Refco Inc. and R.J. O'Brien & Associates each bought 200 March, floor sources said.

CBOT wheat futures volume was estimated by the CBOT at 20,000 lots, about the same as the 20,231 lots traded Thursday.

Wheat options volume was estimated at 4,500 lots. -Reuters