20000225CBOT wheat closes lower on rainfall forecasts

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed lower Wednesday, pressured by bearish export developments and expectations for moisture relief in the dry US Plains.

CBOT wheat closed 1/2 to 7-3/4 cents per bushel lower, with March down 7-1/2 at $2.54-3/4.

"We went up for the most part on weather and the weather has changed a bit so consequently we're taking some weather premium out," said Don Roose, analyst for US Commodities, Des Moines Iowa.

In the US, precipitation in parts of Oklahoma, Kansas and Texas early this week was expected to provide some relief for dry wheat acreage. But the driest areas -- primarily the western regions of Kansas and Oklahoma -- likely will receive only light amounts of moisture, meteorologists said.

Badly needed rain fell on dry fields from Texas to the Dakotas on Wednesday, and more rain was due in coming weeks, meteorologists said.

Forecasters now expect a wet weather pattern to replace the dry one that has been in place since last summer.

"We are going to have to call it a wet weather pattern," said Harvey Freese, a meteorologist with Freese-Notis Weather. "It is a definite shift in the weather pattern."

Freese said some areas in the central United States will continue to be dry, but the size of the dry areas will shrink.

Export news Wednesday suggested the US wheat market likely won't receive a significant pickup in foreign business any time soon, traders said.

Chinese industry sources said that a Chinese delegation touring the western United States was only on an exploratory mission and probably wasn't seeking to buy wheat. The delegation's visit followed a bilateral agreement last April in which China agreed to accept Pacific Northwest wheat, ending protracted disputes on the TCK fungus found in wheat shipments from the region.

Egypt's main official wheat buyer said on Wednesday he was cancelling a tender for 60,000 tonnes of any type of US wheat, soft French wheat or standard Australian wheat as bids had failed to meet his conditions.

Samir Shakankiri, vice-chairman of the state General Authority for Supply Commodity (GASC), also said the GASC had changed one of its conditions, saying final documents and payment would be handed over only after acceptance of the wheat by all official Egyptian authorities, including those concerned with health and agriculture and the general organisation for export and import control.

Commodity funds sold at least 2,500 contracts on the day. RJ O'Brien & Associates sold 300 May contracts and 600 July and FIMAT Futures Inc. bought 1,200 May and sold 300 March.

CBOT wheat futures volume was estimated by the CBOT at 40,000 lots, above the 34,627 lots traded Tuesday.

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