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CBOT wheat closes higher on late rally in soybeans

CHICAGO: Soft red winter wheat futures at the Chicago Board of Trade closed higher on Wednesday on a late rally in soybeans and on short covering after the sharp break in prices Tuesday.

CBOT wheat closed 1 to 1-1/2 cents higher with May up 1-1/2 at $2.61-3/4.

The higher close flew in the face of bearish fundamental input from the weather with widespread rains this week and forecasts for more rain next week expected to add bushels to the US winter wheat crop production coffer.

"Wheat deserves to be unchanged to lower in view of the weather in the Southwest," said Dale Gustafson, analyst for Salomon Smith Barney.

Weather Services Corp. meteorologist Joel Burgio said crop-enhancing rainfall was poised to move through almost all of the US winter wheat growing region this week.

Burgio said the US Great Plains hard red winter region would receive the bulk of the rainfall and the drier areas of west Texas enjoyed a drink of water during the past 24 hours.

The export arena focused on bits and pieces of business, with the Commodity Credit Corp. saying Tuesday it bought 10,000 tonnes of hard red winter wheat for donation to Colombia.

The market was waiting for results of an Algerian tender on Tuesday for 100,000 tonnes of optional origin soft wheat for April-May shipment.

The tender was for 50,000 tonnes soft wheat for shipment between April 16 and 30 and 50,000 tonnes for shipment between May 1 and 15, the official said.

Technical traders cited support in the May at $2.57-1/2 and resistance at $2.64-1/2.

Funds sold 200 lots. E.D. & F. Man International sold 500 May and bought 100 May, FIMAT Futures bought 200 July, Rand Financial sold 400 May and Cargill Inc. sold 200 May.

CBOT wheat futures volume was estimated by the CBOT at 18,000 lots, below the 29,581 lots traded Tuesday.

Wheat options volume was estimated at 4,500 lots.-Reuters