Wheat Drops to 42-Month Low; Egypt Favors Russia Grain

Jan 29, 2014 4:07 pm ET

(Corrects wheat settlement in fourth paragraph.)

Jan. 29 (Bloomberg) -- Wheat declined to the lowest since July 2010 on signs that buyers are shunning U.S. supplies in Egypt, the world’s largest importer. Corn and soybeans fell.

Egypt’s General Authority for Supply Commodities, the state grain buyer, bought 240,000 metric tons of wheat in a tender yesterday, with 75 percent of the supplies coming from Russia. U.S. grain accounted for a quarter of the purchase. Futures tumbled 29 percent in the past year as global output climbed.

“Russian supplies captured most of the tender, damping the hopes of market bulls that supplies from Russia and others would be exhausted by now,” Shawn McCambridge, senior grain analyst for Jefferies Bache LLC in Chicago, said in a report to clients today. For U.S. sellers, “it will take more than one cargo at a time to support higher prices.”

Wheat futures for March delivery fell 2.6 percent to close at $5.515 a bushel at 1:15 p.m. on the Chicago Board of Trade after touching $5.50, the lowest since July 14, 2010.

In Paris, milling-wheat prices fell to the lowest since December 2011. Egypt’s state buyer tightened requirements for moisture content, eroding prospects for French exports, according to U.K. grain trader Gleadell Agriculture Ltd.

Corn futures for delivery in March retreated 1 percent to $4.275 a bushel in Chicago, the biggest decline since Jan. 15. The price rose 1.9 percent in the previous six sessions, the longest rally since March.

Soybean futures for March delivery dropped 1.3 percent to $12.6925 a bushel, the biggest loss since Jan. 21.

About three-quarters of the corn and soybean areas in Argentina will get as much as 2.5 inches (6.35 centimeters) of rain the next five days, alleviating crop stress from dry weather since December, Commodity Weather Group LLC said in a report.

In central Brazil, dry weather the next 10 days will aid early harvesting, the forecaster said. The nation exported 187,000 metric tons of soybeans, the first shipments of the season, the Paranagua port press office said today.

--Editor: Patrick McKiernan