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CBOT wheat ends higher on weather, soya strength

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed mostly higher on Thursday amid concerns over the weather in the US Plains, commodity fund buying and spill-over support from soyabeans, traders said.

CBOT wheat futures settled 1 cent per bushel lower to 2 cents higher, with March up 1-3/4 at $2.48-1/2.

Traders said funds bought 1,100 contracts as they covered short positions on the final day of trading this year. Confetti filled the air as the closing bell rang out at the exchange.

"Wheat was getting support because of the weather," said floor commentator Vic Lespinasse of AG Edwards at the CBOT.

The US Plains, where temperatures rose past 70 degrees Fahrenheit this week, was forecast to see the mercury fall to single-digit or mid-teens next week, Weather Services Corp. agricultural meteorologist Joel Burgio said Thursday.

Burgio said that because this week's warmth did not last long enough to rouse the wheat crop from its winter dormancy, cold-weather damage next week was unlikely.

"A few more days of 70-degree temperatures, and you may have to think about the crop losing some of its winter hardiness," Burgio said. "Since it's a gradual cool-down, the crop will be cold-hardened and more protected from bitter cold snaps. It actually is favourable for the crop."

Burgio said the generally dry conditions gripping much of the Plains look to persist through the winter, which could eventually pose problems for the wheat crop.

Also supporting the market was a strong run by soyabeans from the opening bell amid disappointment over the amount of rain in the key growing regions of Brazil, the world's second largest producer after the United States.

Soyabeans also gained from lower-than-expected deliveries posted Thursday, the first notice day for January futures.

The support from weather concerns and soyabeans helped wheat futures to overlook weak US exports.

The US Department of Agriculture, in its weekly export sales report released before the market opened on Thursday, listed net US wheat sales for the week ended Dec. 23 at 455,000 tonnes, 16 percent below the previous week and 27 percent below the four-week average.

Traders were also optimistic over export business next week or early in the new year, including a tender by Pakistan for 500,000 tonnes of US or Australian soft white wheat.

R.J. O'Brien bought 800 March contracts, Lehman Brothers bought 200 March, Refco Inc. bought 100 March, Cargill Inc. sold 100 March.

CBOT wheat futures volume was estimated by the CBOT at 8,000 lots, compared with the 5,819 traded on Wednesday.

Wheat options volume was estimated at 3,500.

CBOT soya ends year strong on S. America weather

Soyabean futures at the Chicago Board of Trade finished the final trading day of 1999 on a strong note, posting firm gains as renewed concerns over the weather outlook in South America's soyabean belt triggered fund buying, traders said.

CBOT soyabeans settled 6-1/2 to 7-3/4 cents per bushel higher, with January contracts up 7-1/4 at $4.61-3/4 and March up 6-1/2 at $4.69-3/4.

CBOT agricultural markets closed early at 12:10 p.m. CST Thursday and will be closed Friday ahead of the New Year's Day holiday.

For the year, CBOT soyabeans, based on the spot futures contract, fell 76 cents, or 14 percent, a reflection of a near-record US crop, large worldwide supplies and stiff competition for global export business from South America. The spot contract ended 1998 at $5.37-3/4.

Lower-than-expected deliveries against the January contract, which entered its delivery period Thursday, also lifted soyabeans, helping prompt short covering among speculative commodity funds ahead of the new year, traders said. Funds were estimated to have bought at least 1,300 contracts up to late trading.

"It's some short covering going into Y2K," said Robert Lekberg, grain and oilseed analyst for Goldenberg Hehmeyer & Co. "And they're trying to put a little weather premium back into the market, because in some circles, there's a little dissatisfaction on the moisture levels in South America."

Rainfall amounts so far this week in some of Brazil's key soyabean states, including Rio Grande do Sul, were deemed disappointing.

Over the past 24 hours, 0.1 to 0.5 inch of rain fell from Rio Grande do Sul northward to southern Parana, with only isolated activity otherwise, Weather Services Corp. said. Scattered rains of 0.25 inch to 0.75 inch were possible in the same region during the next 24 to 36 hours, but coverage may only be about 50 percent, Weather Services added.

Temperatures were expected to climb to above normal levels by Monday, and were projected above-normal later in the week.

"More rain is needed for emerging and developing soyabeans in most major growing areas except the northern Mato Grosso," Weather Services said in a report, referring to another major soyabean state in Brazil.

Brazil is the world's second-leading soyabean producing nation behind the United States, and has had drier-than-normal conditions in many areas since the planting season began in mid-October.

Also Thursday, the CBOT said 726 contracts were posted for delivery against January soyabeans. Prior to Thursday, traders anticipated deliveries anywhere from 400 to 4,000 contracts against January soyabeans, with many favouring a range of 1,000 to 2,000. Heavy deliveries push supplies onto the market and often pressure nearby CBOT futures.

The weather concerns overshadowed weak government export readings, traders said. The US Department of Agriculture's weekly export sales report Thursday listed net US soyabean sales for the week ended December 23 at 313,200 tonnes, a marketing year low and 47 percent under the four-week average. Expectations ranged from 200,000 to 700,000 tonnes.

However, some downplayed the export data, arguing that export activity is typically slower during holiday periods. Up to the last 45 minutes of trading, Refco Inc. bought 700 March contracts and O'Connor & Co., Cargill Inc., ADM Investor Services, Rand Financial Services and Iowa Grain each bought 200 March, floor sources said.

In spreading, TENCO Commercial Grain bought 400 January and sold 400 March at a price differential of 8-1/2 cents.

In options, E.D. & F. Man International bought 500 March $5.50 calls.

Soyabean futures volume during Thursday's pit session was estimated by the CBOT at 40,000 contracts, compared with 57,923 Wednesday.

CBOT soya products end firmer as soyabeans surge

Soyameal and soyaoil futures at the Chicago Board of Trade ended 1999 higher, as product markets tagged along with soyabeans in a South American weather-driven surge.

Soyameal futures settled $2.00 to $2.20 per ton higher, with January contracts up $2.20 at $146.70 and March up $2.10 at $146.80. Soyaoil settled 0.09 to 0.14 cent per lb higher, with January up 0.14 at 15.75 cents and March up 0.10 at 16.02.

CBOT agricultural markets closed early at 12:10 p.m. CST Thursday and will be closed Friday ahead of the New Year's Day holiday.

For the year, CBOT soyameal, based on the spot futures contract, gained $5.60, or 4 percent, and soyaoil lost 7.08 cents, or 31 percent. Spot meal ended 1998 at $141.10 and spot soyaoil ended at 22.83 cents.

The downtrend in soyaoil reflected abundant US and South American supplies of soyabeans and soyaoil as well as weaker export demand, while US soyameal prices were underpinned by stronger exports.

CBOT soyabeans finished 6-1/2 to 7-3/4 cents per bushel higher Thursday, sparked by scant rainfall amounts so far this week in Brazil and an outlook for warmer and relatively dry conditions next week.

Weather jitters help trigger a move among speculative commodity funds to buy back short positions in the soya complex ahead of the long holiday weekend and the end of the year, traders said. Funds bought about 1,000 soyaoil contracts up to late trading, pit sources said.

"A lot of this was just evening-up," said Robert Lekberg, grain and oilseed analyst for Goldenberg, Hehmeyer & Co.

Brazil and Argentina are the world's second- and third-leading soyabean, soyameal and soyaoil producing nations behind the United States. Both have had drier than normal conditions since the planting season began in mid-October, and they are heading into the soyabean crop's most moisture-intensive stages, which typically take place in January and February.

The weather concerns overshadowed what many considered bearish news for soyaoil regarding deliveries and exports.

Thursday was first notice day for January CBOT contracts. The CBOT said 3,010 contracts were posted Thursday for delivery against against the January soyaoil position, with ADM Investor Services responsible for the entire amount.

The total was higher than many had expected, with forecasts generally running from 500 to 2,000 contracts. Deliveries push supplies onto the market and often pressure nearby CBOT futures.

But Lekberg downplayed an impact from Thursday's deliveries, arguing that the market has long been aware of the large amount of oil stockpiles around the United States.

"That was no real surprise," he said. "We've got plenty of oil around."

Meal deliveries were one contract, at the low end of expectations for nil to 100 contracts.

Also Thursday, the US Department of Agriculture's weekly export sales report listed net US soyaoil sales for the week ended December 23 at 7,900 tonnes, down 19 percent from the previous week but 6 percent above the four-week average. Net meal sales were 100,200 tonnes, 39 percent below the four-week average but within trade estimates for 50,000 to 130,000 to tonnes. Up to the last 45 minutes of trading, R.J. O'Brien & Associates bought 600 March soyaoil contracts, Goldenberg Hehmeyer & Co. bought 200 January and sold 200 March and ADM Investor Services sold 200 March and 100 May, floor sources said.

In meal, Carr Futures bought 200 March.

Soyameal futures volume during Thursday's pit session was estimated by the CBOT at 13,000 contracts, compared with 22,074 Wednesday.

Soyaoil volume was estimated at 25,000 contracts, compared with 23,216 Wednesday.-Reuters