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CBOT wheat closes higher on weather, soy gains

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher on Monday, reaching the highest levels in over two months on a rally in soyabeans and on dry weather in the U.S. Great Plains hard red winter wheat growing region, traders said.

CBOT wheat closed 1/2 to 3 cents higher, with March up 1-3/4 at $2.66.

"I think it's the Plains weather and also wheat needed a premium going into spring," said Jason Roose, analyst for U.S. Commodities in Des Moines, Iowa. Also, "the complexion of the market changed two weeks ago after the crop report."

Wheat futures have been gaining since the release of the U.S. Department of Agriculture's crop report on Jan. 12. USDA cut its estimate for 2000 U.S. winter wheat acreage to 42.916 million from last year's 43.425 million. The USDA also trimmed its outlook for U.S. wheat ending stocks for 1999/2000 to 972 million bushels from the previous forecast for 1.027 billion.

The combination of reduced wheat acreage and reduced wheat stocks left weather as a more vital market factor in wheat futures. The Plains States hard red winter wheat region remains dry.

Weather Services Corp. projected a chance of snow in western areas of the wheat belt Wednesday and Thursday, but overall expected little change in the region's dry pattern this week.

"Stands are spotty and some crops that were planting in the fall have failed to emerge with seedling death being reported also," Weather Services Corp. said in a report Monday.

"There is no widespread, beneficial moisture in sight. The lack of protective snow cover is not a major problem at this time as there is no damaging cold in sight. Some snow cover may be put down later this week as there is some chance of snow."

"Trends in Chicago wheat are mixed to up, with objectives of $2.82 March," said Jack Scoville, a trader with Price Futures Group, in a report prior to Monday's open. He placed support in March at $2.62, $2.61 and $2.60 and resistance at $2.65, $2.66 and $2.67.

CBOT wheat futures volume was estimated by the CBOT at 28,000 lots, above the 19,355 lots traded Friday.-Reuters