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CBOT wheat ends lower as rain falls across Plains

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed lower on Monday amid forecasts for crop-friendly U.S. weather, traders said.

CBOT wheat closed 2 to 6 cents lower, with May down 6 at $2.66-1/4.

"If you add up the world stocks, there's plenty of everything to go around. So if the weather turns out to give us at least an average crop, it's probably bearish," said Don Roose, analyst for U.S. Commodities in Des Moines, Iowa.

Weather Services Corp. meteorologist Joel Burgio said early Monday that the wheat belt should see more rain this week, with most expected to fall Wednesday and Thursday in the U.S. Great Plains hard red winter wheat area.

Major producing areas likely will see 0.25 inch to 1.00 inch of rain, he said.

Burgio said there was a good chance for beneficial rainfall late this week in west Texas, an area that continues to struggle with dry weather.

Over the weekend there was snow in western Kansas and in southern Nebraska, leaving melted precipitation amounts of from 0.10 inch to 0.30 inch, he said. Light rain from 0.10 to 0.30 inch fell elsewhere in the Plains.

Cash protection of 3 to 5 cents per bushel was placed by cash dealers on winter wheat basis bids early Monday in anticipation of the lower futures market opening. Wheat movement wasn't heavy enough to warrant the protection but the expectations of sharp declines in futures spurred the protective action.

On the export front, the debate over prospective exports to Iran continued following last week's easing of sanctions on Tehran by the United States.

Australia's national wheat exporter said on Monday it had sold over 1 million tonnes of wheat to Iran so far in 1999/00 and was unfazed by Washington's decision to ease sanctions.

Iran is the world's biggest wheat importer and one of Australia's main wheat customers, taking 1.66 million tonnes in 1998/99. U.S. and European traders now see Iran returning to the market for the U.S. wheat that it has refused to buy since 1981 -- although signals from Tehran were mixed.

Technical traders cited support in the May contract at $2.67-3/4, second support at $260-3/4 and resistance at $274-3/4.

Funds sold 300 lots. E D&F Man International sold 400 May contracts, RJ O'Brien sold 200 July, Merrill Lynch bought 200 May, Refco Inc. bought 700 May and sold 500 May.

CBOT wheat futures volume was estimated by the CBOT at 17,000 lots, below the 27,349 lots traded Friday.

Wheat options volume was estimated at 4,000 lots.ÑReuters