WHEAT PRICES REACH HIGHS ON PROSPECTS OF SOVIET SALES

WHEAT PRICES REACH HIGHS ON PROSPECTS OF SOVIET SALES

Wheat prices traded mostly higher Wednesday with the active March 1992 futures contract hitting the highest price for a nearby month in 11 years on optimism about sales of U.S. wheat soon to the Commonwealth of Independent States.

Contract highs were set in all wheat futures months on the Chicago Board of Trade in active trading. The March delivery rose to $4.49 1/4 a bushel early Wednesday before losing 3/4 cent in late afternoon trading.The U.S. Department of Agriculture is expected to announce soon the commodities the Commonwealth can buy with a February credit installment, and wheat and soymeal are expected to be major components.

Talk that credit installments set for March and April release also may heavily feature wheat further lifted futures.

Commonwealth grain buyers are asking for wheat and Russia has asked for additional credit beyond the February, March and April amount of $650 million.

Expectations for Egypt to buy 250,000 metric tons of U.S. subsidized wheat on the weekend also supported prices.

Renewed talk about India's mission to buy U.S. wheat, perhaps 1 to 2 million tons, also lifted prices, traders said. Gains were limited by scattered profit-taking and by moderate weather patterns throughout the U.S. winter wheat growing region, which is keeping away fears of winterkill damage to the crop.

Prices also were capped by news Australian wheat plantings will total 10.2 million hectares in the 1992-93 harvest season, the highest level in 7 years and up from 7.9 million in 1991-92. A hectare is 2.2 acres.

Soybean futures traded mixed in choppy trading, but gained some support amid talk that a 200,000 ton sale of U.S. soybean meal might have been made to the Commonwealth.

Also boosting soybeans and soymeal was spillover from the wheat pit.

Talks continued in Washington Wednesday between the U.S. Department of Agriculture and Exportkhleb, the main grain buying agency of the Commonwealth . Hopes for an announcement this week on the allocation of $200 million in credits, or for credits due in March and April to be brought forward, kept futures well supported.

However, the negotiations may have run into a technical snag that could delay the process indefinitely, wire service reports said.

Oat futures rose to new contract highs again on expectations of lower 1992 acreage as farmers switch to higher-priced wheat. The March 1992 contract peaked at $1.66 3/4 a bushel.

Support continued from talk that Sweden and other Scandinavian countries are exporting oats again to the former Soviet Union, possibly through a credit or barter arrangement. The former Soviet Union was a major importer of Scandinavian oats until its political disintegration caused business to fall off last year. Sweden then exported oats to the United States, a major pressuring factor on futures last year.