20000311

CBOT wheat ends higher as dry forecasts return

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed higher on weather factors, bullish export news, and position squaring ahead of Friday's USDA crop reports, traders said.

Weather forecasts appeared to be the primary focus with more dry weather likely for Texas wheat, which has been struggling to recover from dry conditions.

"The weather has indicated a little bit of a return to a warmer, drier pattern," said Shawn McCambridge, grain analyst with Prudential Securities.

The dry pattern will begin in the southern Plains and spread north into the Dakotas, but it is in the southern Plains where the wheat is struggling.

"That continues to be the area that is in the worse condition," said McCambridge.

Forecasts from mid-March to late March suggest above normal temperatures and below normal rainfall for Nebraska south to Texas. That dry area could eventually spread into the Dakotas, said Russ Bigley, meteorologist with Strategic Weather Services.

"It is going to start warming up soon," said Bigley, with 70-degree temperatures likely to return to the central and southern Plains by next week.

Also bullish for CBOT wheat was export news early Thursday. USDA reported net export sales of U.S. wheat for the week ended March 2 at 656,100 tonnes, which exceeded trade estimates that ranged from 150,000 to 450,000 tonnes.

Despite the bullish weekly export numbers, McCambridge expects USDA to pare its wheat export estimate in Friday's report because so far this year actual sales have been less than expected. In February, USDA estimated 1999/2000 wheat exports at 1.05 billion bushels.

CBOT wheat closed up 1-1/2 to 3 cents with May up 1-1/2 at $2.63-1/4 per bushel.-Reuters