New buyers shy away from costly US wheat

New wheat buyers are avoiding US wheat due to high prices, traders and analysts said Friday (Nov 13).

Huge wheat stockpiles remain available worldwide and overseas buyers will likely pick the cheaper offerings before considering US supplies.

India has struck deals to import wheat for the first time in two years. While India is likely to buy more, the country may pick Australian or Black Sea wheat over the overpriced US wheat, said Joe Bedore, CBOT floor manager for trade house FC Stone. 

More trades could quickly follow, but the US was unlikely to get of that business, said analysts.

The US market needs to price down due to high global supply, and buyers will not look at US wheat until it gets cheaper, said a grain dealer.

For the marketing year that started in June, wheat exports were running close to five million tonnes behind the previous marketing year's pace and about 3.5 million tonnes behind the five-year average.

Export demand for wheat has been on the rise recently as buyers have issued a flurry of tenders during the past week but most countries were passing on US supplies.

Egypt's main government wheat buyer said on Thursday (Nov 12) it bought 295,000 tonnes of Russian wheat for shipment on December 10-25 on a free on board basis, at a price of US$191.37 a tonne.