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CBOT wheat closes lower on rainfall forecasts

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed lower on Tuesday, pressured by outlooks for rain this week in the US Great Plains hard red winter wheat growing region, traders said.

CBOT wheat closed 1/2 to 3 cents lower, with March down 2-1/2 at $2.62-1/4.

Rain was forecast for this week in many dry crop regions of the central United States, but the driest wheat areas in Kansas, Oklahoma and Texas may receive the least amount of moisture, meteorologists said Tuesday.

Above-normal temperatures will be common throughout the Plains and Midwest through next week, they said.

"Rains are in progress west and southwest of Dodge City (Kansas). It is spreading northward," said Brad Nesiba, meteorologist with Strategic Weather Services.

Nesiba said about 0.25 inch of rain should fall from central Kansas south into the Texas panhandle by early Wednesday. From 0.25 to 1.50 inches were forecast for central and eastern Kansas, eastern Nebraska, Iowa and Missouri.

But crop experts have said more moisture is needed in the Plains to ensure a healthy start for the crop when it breaks winter dormancy and enters the spring growing season.

Traders said the mostly dry conditions in the central and southern US Plains wheat belt over the weekend and a limited precipitation outlook this week was sufficient to keep aggressive selling away from the wheat futures pit.

Also there was some support to wheat futures on beliefs that China may purchase US wheat soon, as traders noted that a Chinese delegation was expected to visit US wheat areas this week. Earlier Tuesday, Taiwanese interests bought 67,200 tonnes of US wheat.

Commodity funds were light to moderate net sellers on the day, traders said. FIMAT Futures Inc. bought 200 May contracts and 200 July.

CBOT wheat futures volume was estimated by the CBOT at 35,000 lots, above the 20,996 lots traded Friday.

Wheat options volume was estimated at 3,500 lots. -Reuters