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CBOT wheat ends up as Plains weather stirs buying

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher on Monday on increased buying tied to concerns about dry weather in the US Great Plains hard red winter wheat growing region, traders said.

CBOT wheat closed 1 to 3 cents higher, with March up 1-3/4 at $2.58-3/4.

"It was all weather today, dry weather in the Plains for wheat and South American weather for beans," said Victor Lespinasse, floor spokesman for A.G. Edwards & Sons Inc.

Warm and dry weather over the weekend in the Plains generated a smattering of short covering in wheat and some new buying surfaced but the trading was relatively muted, traders said.

The large stockpile of wheat worldwide continued to dampen bullish enthusiasm for wheat futures, the traders said.

Conditions in the Plains were dry and warmer than normal over the weekend, Weather Services Corp. said, with high temperatures reaching 60 to 63 degrees Fahrenheit in western Kansas.

The dry and warm weather was likely to continue through Wednesday with a possibility of only scattered showers on Thursday, WSC said.

Gains were limited by reminders of stiff export competition from other world wheat producers, traders said.

Earlier Monday, an official with AWB Ltd., Australia's wheat marketing arm, said Australia sold 900,000 tonnes of wheat to Iraq. The confirmation follows weeks of trade speculation that Australia had sold more than 600,000 tonnes of wheat to Iraq in the latest phase of that country's oil-for-food deal. AWB earlier confirmed it sold about 700,000 tonnes of wheat to Iraq under the last oil-for-food phase.

O'Connor and Co. bought 800 March contracts, RJ. O'Brien bought 500 March and E.D. & F. Man International sold 400 March, pit sources said. In spreading, Cargill Inc. bought 500 March and sold 500 May at a price difference of 11-1/4 cents.

CBOT wheat futures volume was estimated by the CBOT at 21,000 lots, below the 29,912 lots traded Friday.

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