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CBOT wheat closes lower as soy falls, wheat stocks

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed lower on Friday on pressure from a fall in soybeans plus a reminder of the large stocks of wheat, traders said.

CBOT wheat closed 1/2 to 2-1/2 cents lower with March down 2-1/4 at $2.69-1/2.

Soybeans dropped sharply on improved crop weather in South America and the wheat market found independent pressure from the latest USDA supply/demand report, traders said.

USDA raised its forecast for US wheat stocks at the end of the 1999/2000 marketing year to 997 million bushels from 972 million.

The increase largely reflected a weaker foreign demand outlook, as the USDA trimmed projected 1999/2000 US wheat exports by 25 million bushels to 1.05 billion.

Some of the world numbers were also deemed slightly bearish, as the USDA hiked Australia's estimated 1999/2000 production and exports by 500,000 tonnes each.

However, the USDA also lowered world ending wheat stocks for 1999/2000 to 127.23 million tonnes from a previous 129.38 million. Wheat was underpinned by hopes for a food aid package soon from the US government, they said.

Traders said the dry weather in the US winter wheat belt continued to stir concerns about possible cuts in wheat production for this year's US wheat crop.

Goldenberg, Hehmeyer & Co. bought about 1,000 July contracts shortly before the close, and Cargill Inc. sold 300 March. Prudential Securities bought 2,000 March contracts, ING Futures & Options bought 800 March and Carr Futures bought 500 March, floor sources said.

CBOT wheat futures volume was estimated by the CBOT at 44,000 lots, below the 57,679 lots traded on Thursday.

Wheat options volume was estimated at 12,000 lots.-Reuters