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CBOT wheat ends down on Plains weather outlooks

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed lower Thursday on improved crop weather outlooks for the US Great Plains hard red winter wheat region, traders said.

CBOT wheat closed 1/2 to 4 cents lower with March down 3-1/2 at $2.53-3/4.

"The prospects for rains in the Plains weighed on the wheat market and the trade is still hung up on the export sales. The sales last week were good for wheat but still not as good as a year ago," said Dale Gustafson, analyst for Salomon Smith Barney.

The latest 6-to-10-day outlook from the National Weather Service projected above-normal temperatures and precipitation Feb. 8-12 for Kansas, the leading US wheat-producing state. For Oklahoma, another major wheat grower, the NWS projected above-normal temperatures and normal precipitation.

Drier-than-desired weather this winter in these states has been leading to concern about harm to the US winter wheat crop. Recent snowfall in the Plains combined with the outlooks for precipitation tended to diminish fears about cuts in crop production.

The market also received more reminders of the stiff competition the United States faces in global export business. AWB Ltd, Australia's grower-controlled wheat marketer, confirmed on Thursday that it recently sold wheat to Iraq. Australian wheat traders have speculated that AWB has sold more than 600,000 tonnes of wheat to Iraq in the latest phase of that country's oil-for-food deal.

Some underpinning may have come from the US Department of Agriculture's weekly export sales report, released early Thursday. It showed net US wheat sales for the week ended Jan. 27 at 566,000 tonnes, 97 percent higher than the previous week and more than 2-1/2 times the four-week average.

Expectations ranged from 250,000 to 400,000 tonnes.

Japan, at 112,400 tonnes, was the largest buyer listed by the USDA, while South Korea bought 106,400 tonnes. Actual exports of 477,300 tonnes for the same period were up 6 percent from the four-week average.

Funds sold at least 3,000 contracts on the day, floor sources said. Carr Futures sold 700 March and Cargill Inc. bought 800 March.

CBOT wheat futures volume was estimated by the CBOT at 24,000 lots, above the 12,664 lots traded Wednesday.

Wheat options volume was estimated at 8,000 lots.-Reuters