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CBOT wheat ends firm as dry weather stirs concern

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed firm on Tuesday after moving early to the highest levels in more than six weeks amid ongoing concern over dry conditions in the US Plains wheat belt.

CBOT wheat closed steady to 1/4 cent higher, with March up 1/4 at $2.53-3/4.

The Plains wheat crop has suffered from dry conditions since the planting season began last fall, and little relief was in sight, forecasters said. The crop is in winter dormancy now and dryness was not considered a major near-term threat, but could become more of a problem once the crop emerges from dormancy in the spring, meteorologists said.

The latest 6- to 10-day forecast from the National Weather Service projected above-normal to much above-normal temperatures and no precipitation for Kansas, Oklahoma and north Texas for Jan. 16 to 20.

Several weather specialists Tuesday said the dry pattern may continue through spring spelling bad news for crops.

In export-related news, the White House budget office approved funds to ship approximately 900,000 to 1 million tonnes of wheat under food donation agreements in fiscal 2000, US Department of Agriculture aides said Monday. Trading was choppy and relatively quiet ahead of a host of USDA reports Wednesday. The USDA will release reports on US winter wheat acreage, monthly supply and demand, quarterly US stocks and final 1999 US corn and soybean production.

Analysts look for the USDA to show a continued decline in US winter wheat plantings. An average of analysts' estimates placed 2000 US winter wheat acreage at 42.974 million, below the 43.425 million acres in 1999.

Funds bought 500 lots. In late dealings, Cargill Investor Services bought 800 July $2.70 calls and sold 600 March futures.

On the day, Rand Financial Services bought 400 March wheat contracts, Carr Futures bought 300 March and E.D. and F. Man International sold 300 March.

CBOT wheat futures volume was estimated by the CBOT at 21,000 lots, below the 22,579 lots traded Monday.

Wheat options volume was estimated at 10,000 lots.-Reuters