20000116CBOT wheat closes higher on weather concern, soy

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher Friday after hitting their highest levels in nearly two months on a boost from soybeans and ongoing concerns over US Plains dryness.

CBOT wheat closed 1/2 to 1-3/4 cents higher with March up 1-1/2 at $2.65.

Plains winter wheat has suffered from below-normal rainfall since the start of the planting season last fall, and meteorologists expected little change in the dry pattern through at least the early part of next week.

Above-normal temperatures were expected for early next week, with highs ranging from the 50s to possibly 70s degrees Fahrenheit.

"Crops are mostly dormant but may suffer come springtime due to below normal soil moisture," Weather Services Corp. said Friday in a report on Plains wheat. "There is a lack of protective snow cover in the region. However, no damaging cold is in sight at this time."

Wheat and other CBOT markets also garnered support from a lower supply outlook from the US Department of Agriculture. US grain and soybean stocks for 2000 were considered less burdensome than thought previously, though were still historically large.

Lower supply prospects, combined with concerns over weather in South America, helped push CBOT soybeans to a 5 to 8-1/4 cent per bushel higher close Friday.

Funds bought 4,000 lots. FIMAT Futures bought 2,000 March and sold 1,000 March, E.D. & F. Man International bought 1,200 March and sold 300 March, Salomon Smith Barney bought 500 March.

CBOT wheat futures volume was estimated at 34,000 lots, above the 29,835 lots traded Thursday.

Wheat options volume was estimated at 17,000 lots. -Reuters