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CBOT wheat ends firm on short-covering bounce

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed firm on Thursday on a mild bout of short covering after the sharp break in prices on Wednesday.

CBOT wheat closed unchanged to 1-1/2 cents higher, with March unchanged at $2.54-3/4. May closed 3/4 higher at $2.67-1/4.

"I simply think that yesterday the slide was overdone and it was due for a little recovery here," said Shawn McCambridge, analyst for Prudential Securities.

Wheat fell hard Wednesday on moisture received in several key US winter wheat growing areas.

But on Thursday, the gains in wheat were capped by a recent shift in weather patterns in the US Great Plains hard red winter wheat growing region.

Over the past 24 hours, rains of 1/4 to 1-1/2 inch fell over the eastern half of the Plains winter wheat belt, Weather Services Corp. said.

Rains were lighter in the western areas where conditions have been driest and wheat ground was in the most need of moisture. Western areas received 1/4 inch or less, Weather Services said.

Eastern areas should receive another 1/4 to 1 inch on Friday, Weather Services added. Though the western winter wheat belt appeared to be getting short-changed, the rains should still be a welcome relief for wheat farmers, meteorologists said. Winter wheat acreage in Kansas and neighbouring states has suffered from below-normal precipitation since it was seeded last fall.

In export news, Algeria launched a tender for 100,000 tonnes optional origin soft wheat and 100,000 tonnes of US, Canadian or Syrian durum wheat, European grain traders said on Thursday.

Japan's Food Agency bought 80,000 tonnes of US wheat in its weekly tender earlier on Thursday.

Technically, chart patterns for CBOT wheat have turned increasingly bearish following sharp losses this week, traders noted.

May CBOT wheat fell 7-3/4 cents on Wednesday to $2.66-1/2, the contract's lowest close since $2.65 on Feb. 3.

Refco Inc. bought 500 on May contracts up to late trading, Rand Financial bought 300 on May, E.D. & F. Man International bought 400 March, FIMAT Futures Inc. bought 300 on May, Term Commodities sold 500 July and O'Connor & Co. sold 500 May, floor sources said.

CBOT wheat futures volume was estimated by the CBOT at 38,000 lots, below the 50,470 lots traded on Wednesday.

Wheat options volume was estimated at 5,300 lots.-Reuters