July 21, 2010

CBOT wheat falls after Egypt avoids US grains

Wheat futures fell for a third straight session on Tuesday (July 20) after Egypt shunned US supplies and bought Russian grain.

Egypt on Tuesday said it purchased 120,000 tonnes from Russian inventories. Iraq on Monday (Jul 19) agreed to buy 350,000 tonnes from the US, Romania, Australia, Canada and Russia. The US share was 50,000 tonnes, said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas. Some analysts thought Russia would be curbing exports because of a drought, he said.

"We just don't have wheat priced right," Glenn said. "Russia's still in business. They're not gone. With all the problems in the Black Sea, they're still selling wheat. They're apparently not concerned about it or they wouldn't be peddling any."

Wheat futures for September delivery on July 20 fell eight cents, or 1.4%, to US$5.7425 a bushel at 10:02 a.m. on the Chicago Board of Trade. The price dropped 2.3% in the previous two sessions. The commodity jumped 25% in the four weeks that ended July 15 as dry weather curbed yields in Russia.

The US is the largest exporter of wheat, followed by Canada, Australia and Russia, USDA data show.

Wheat is the fourth-biggest US crop, valued at US$10.6 billion in 2009, behind corn, soy and hay, government data show.