20000305CBOT wheat ends firm on gains in soy complex

CHICAGO: Chicago Board of Trade soft red winter wheat futures closed firm Friday on gains in soybeans with crop beneficial weather in the US Great Plains and forecasts for additional rainfall next week checking gains.

CBOT wheat closed unchanged to 1/2 cent higher with March up 1/4 at $2.47-1/2. May was unchanged at $2.58-1/4.

"Wheat just followed along with beans. The weather in wheat is bearish," said Fred Soneson, analyst for LFG.

Some underpinning was seen in news that the United States would begin over the next few months to ship 300,000 tonnes in wheat donations to Russia.

US Department of Agriculture General Sales Manager Richard Fritz said the United States and Russia had finalised an agreement that would clear the way for the wheat to be donated to Russia. Details were expected on Friday.

The USDA also said it would donate 35,000 tonnes of US wheat to Montenegro to help bolster the region's food supplies and reduce US stocks.

But overall weakness in wheat was pegged to improving weather conditions in the US winter wheat belt.

Weather Services Corp. reported early Friday that rain of 0.5 inch to 1.5 inches (13-38 mm) was common in most areas of the US Great Plains hard red winter wheat region Thursday.

The rain greatly improved moisture conditions in southern Nebraska, Kansas, Oklahoma and far northern Texas, with areas a little further south in Texas seeing less moisture from the storm that just passed through, WSC said.

Wheat has broken dormancy in much of Kansas and has suffered only slight damage in some areas from winter freeze and wind. Crops were in very poor condition in Texas where some fields were ploughed up, according to WSC. It cited the chance of a few light showers Sunday and Monday, followed by thunderstorms Tuesday, but favouring the eastern locations.

Export activity Friday included news that Philippine firms sought tenders on Friday for the import of 63,500 tonnes of US and Canadian wheat. South Korea's Cheil Jedang Corp. and Dongah Flour Mills Co. Ltd jointly bought 23,000 tonnes of US No.1 wheat from Japanese trading house Kanematsu Corp. via tenders on Friday, traders said.

North Italian millers bought June/December delivery US dark northern spring wheat at 325,000 to 330,000 lire per tonne free-on-truck over the past week, Italian grain traders said. They estimated total tonnage sold at 70,000 to 100,000 tonnes.

The delivery tally on the March contract Friday was at 3,689 lots again magnifying the lack of urgency in obtaining the abundant wheat supplies.

Chart watchers during Friday's session were eyeing support in the May contract at $2.56 and resistance at $2.60.

Funds sold 2,000 lots. FIMAT Futures bought 300 May, E.D. and F. Man International bought 200 May and 100 July, O'Connor and Co. sold 500 May and 800 July and Refco Inc. sold 500 May.

CBOT wheat futures volume was estimated by the CBOT at 25,000 lots, below the 34,377 lots traded Thursday.

Wheat options volume was estimated at 6,000 lots.-Reuters