CBOT wheat futures drop after USDA announces trade aid package

CHICAGO: Chicago Board of Trade (CBOT) wheat futures dropped on Thursday on spillover pressure from falling corn prices and after the US Department of Agriculture (USDA) unveiled a trade war aid package that could incentivize more planted acres of all crops.

* The Trump administration unveiled the $16 billion farm aid package to offset losses from a trade war with China and said payment rates to farmers would be determined by where they farm rather than what crops they grow.

* The package was seen encouraging farmers to plant further beyond prevented planting insurance deadlines if they can, potentially lifting production.

* CBOT July soft red winter wheat settled 2-1/2 cents lower at $4.70-1/4 per bushel. The contract hit chart resistance at its 100-day moving average.

* K.C. July hard red winter wheat ended down 7 cents at $4.25-1/4 a bushel, while MGEX July spring wheat ended down 9-1/2 cents at $5.34-1/2 a bushel.

* Wet weather in the northern Plains may continue to impede spring wheat planting.

* Heavy rain across the southern Plains wheat belt has raised concerns that some of the developing hard red winter wheat crop may have been damaged or destroyed.

* The USDA said export sales of wheat totaled 393,300 tonnes in the week ended May 16. Analysts' forecasts had ranged from zero to 700,000 tonnes.