Soft red winter wheat futures at the Chicago Board of Trade closed higher on Monday on support from a soya rally and a weak dollar, traders said.
A falling dollar makes US commodities more economical for overseas customers to purchase. The dollar on Monday plunged to within a cent of record lows against the euro. Fund buying, tied to short covering, ranged from 4,000 to 4,500 lots, they said.
CBOT wheat closed 7 to 8 cents per bushel higher, with December up 7-1/2 at $3.16 per bushel. Wheat traders said there was no other dramatic bullish news to drive the market. However, expectations that Pakistan might buy wheat late this week may have aided the advances.
"It's fund buying, but there is some talk about Pakistan," a pit source said. Sources in Pakistan said last on Thursday Pakistan was likely to complete plans for fresh imports of wheat within a week.
The sources said the government might initially aim to buy about 500,000 tonnes. Wheat futures dropped late last week on persistent stiff export competition and spillover pressure from declining corn futures prices.
Egypt last week bought a large amount of wheat from Argentina and a minor amount from the United States. That export deal, along with ongoing references to the record large world wheat crop this year, continue to hamper attempts to rally wheat futures prices.
Gains in wheat also are seen limited amid rapid seeding of the US 2005 winter wheat crop amid overall satisfactory soil moisture levels in key growing states. Exports were quiet over the weekend and cash basis levels in the Midwest on Friday were steady amid light farmer selling.
The US Department of Agriculture on Monday said 19.261 million bushels of wheat were inspected for export by late last week. The market had been expecting the inspections to range from 18 million to 22 million bushels.
On Friday's Commitments of Traders report by the Commodity Futures Trading Commission showed that as of last on Tuesday, large speculators in wheat futures were long 38,117 lots and short 58,153 lots.
Technicals were near neutral, with the nine-day relative strength index for December at 42.