Pressure from the firm U.S. dollar and bearishness about lackluster export demand knocked down U.S. wheat futures Thursday, traders said.
Chicago Board of Trade March wheat fell 9 3/4 cents, or 2%, to US$4.85 a bushel. Kansas City Board of Trade March wheat dropped 8 1/2 cents, or 1.7%, to US$4.93 1/2. Minneapolis Grain Exchange March wheat fell 8 1/4 cents, or 1.6%, to US$5.02 3/4.
The markets didn't get any help from a snub from Egypt's state-owned wheat buyer, the General Authority for Supply Commodities. GASC booked 300,000 tonnes of Russian and French wheat in a tender and none from the U.S., which is seen as too expensive.
Egypt is a major buyer on the world market and known for being price sensitive. Traders didn't expect GASC to book U.S. wheat, but the snub reminded them that U.S. prices were uncompetitive.
"We didn't sell a pound," said Vic Lespinasse, analyst for grainanalyst.com. "They used to be one of our biggest and most reliable customers."
CBOT March wheat closed below its 20-day moving average at US$4.87 and near its session low of US$4.83. Commodity funds sold an estimated 4,000 contracts.
Kansas City Board of Trade
KCBT March wheat finished near its session low of US$4.92.
The stronger dollar set a bearish tone for the markets because it makes U.S. grain less attractive to foreign buyers, traders said. Wheat climbed to four-week highs Monday, when the dollar was weak, but slumped Wednesday and Thursday amid gains in the greenback.
Losses in CBOT corn and soybeans added to the negative tone, although wheat led the downside, traders said. Wheat lacks a supportive fundamental storyline, they said.
Minneapolis Grain Exchange
MGE March wheat settled near its session low of US$5.00 1/4. Its session high was US$5.12 3/4.
Traders will watch Friday for the U.S. Department of Agriculture's weekly export sales report, which is being issued a day later than usual due to the Presidents' Day holiday. Export sales for wheat are expected to be 300,000 to 550,000 tonnes.
