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CBOT wheat closes lower on possible US Plains rain

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed lower on Thursday in response to prospects for improved crop conditions in major US winter wheat areas, traders said. CBOT wheat closed 1/2 to 1-1/4 cents lower, with March down 1 at $2.65.

Traders said recent weather forecasts suggested the US Plains, which have suffered from below normal precipitation for several months, may see relief soon.

The latest National Weather Service six- to 10-day outlook projected above normal precipitation for Kansas, Oklahoma and north Texas -- the heart of the hard red winter wheat belt -- for Jan. 25-29.

Dryness since wheat was seeded last fall led to germination and establishment problems, and could cause more difficulty once the crop emerges from winter dormancy this spring, meteorologists said.

The wheat market also received additional reminders of the abundant supplies worldwide that have tempered export business for US wheat.

The International Grains Council on Thursday said it estimated the 2000 world wheat crop at 586.3 million tonnes, up from its 1999 crop figure of 583.2 million tonnes.

A senior US Agriculture Department official said Thursday that Russia may need no more food aid this year than the previously announced US offer to donate 500,000 tonnes.

US farmers have been hoping USDA would take commodities off a saturated US market to help boost depressed grain and meat prices.

Funds sold 800 lots. Refco Inc. sold 800 March contracts, Cargill Inc. sold 200 March and bought 200 March, Rand Financial Services bought 100 March and 200 July, pit sources said.

CBOT wheat futures volume was estimated by the CBOT at 15,000 lots, below the 16,107 lots traded Wednesday.

Wheat options volume was estimated at 9,000 lots.-Reuters