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CBOT wheat ends up as corn/soy surge, USDA reports

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher Thursday on a strong rally in corn and soybeans with Wednesday's bullish government crop data continuing to fuel gains, traders said.

CBOT wheat closed 4 to 5-1/2 cents per bushel higher, with March up 4-3/4 at $2.63-1/2.

Nearby March set a two-month high of $2.63-3/4, the highest level for that month since $2.67-1/4 on Nov. 17.

"Wheat was a follower and the support was still coming from yesterday's reports," said Dan Cekander, analyst for FIMAT Futures.

The US Department of Agriculture on Wednesday released crop production, supply/demand and wheat acreage data and that provided a bullish surprise to each commodity, including wheat.

Wheat was pressured early Thursday by soft export readings and on a technical setback from Wednesday's surge, trading floor sources said.

The USDA's weekly export sales report reflected an uninspiring export picture for the US wheat market, traders said.

Net US wheat sales for the week ended Jan. 6 totalled 133,600 tonnes, three-fourths below the four-week average and a marketing year low. Technically, traders said the wheat market was poised for a pullback in early dealings Thursday after jumping Wednesday to a seven-week high of $2.58-3/4 in the March contract. The market climbed in response to lower-than-expected USDA stocks and acreage projections.

Still, the market's modest near-term uptrend since mid-December remained intact, traders said, and the market quickly turned firm Thursday as corn and soybeans surged. On Dec. 13, March wheat set a contract low of $2.36-1/2.

Funds bought 2,000 lots. Salomon Smith Barney Inc. bought 500 March contracts and FIMAT Futures Inc. bought 600 March and sold 500 May, pit sources said.

The CBOT estimated wheat futures volume at 26,000 lots, below the 28,675 lots traded Wednesday.

Wheat options volume was estimated at 7,500 lots. -Reuters