July 22, 2011
CBOT wheat drops as importing nations turn to Russia, Ukraine for supplies
CBOT wheat futures fell, erasing earlier gains, as importers of the grain turn to Russia and Ukraine for cheaper supplies after the countries raised their export restrictions earlier this month.
Russia has announced that it would ship 18 million tonnes of grain in the year from July 1, up from as much as 17 million previously forecast. Ukraine may double its grain exports from last year after drought devastated its crop, the government said. Egypt said it bought 180,000 tonnes of Russian wheat at a tender last week and may consider purchasing Ukraine wheat.
"The general vibe in Kiev was that they're going to have a decent harvest in terms of volume," said Dave Norris, an independent grain broker in Harrogate, England, who said Russian wheat is selling for US$40 a tonne less than EU wheat. "It seems like a smart move for Egypt to now re-accept Ukraine wheat their tenders."
Wheat for September delivery fell 0.5 cents to US$6.965 a bushel by. The price has gained 14% this month. Milling wheat for November delivery on NYSE Liffe in Paris fell 0.1% to EUR199 (US$281) a tonne.
Russia ended an export ban on grains on July 1 after the worst drought in a half century curbed production last year.
Corn for December delivery fell 5 cents, or 0.7%, to US$6.7275 a bushel in Chicago. The price declined 1.4% yesterday, the biggest loss since July 1. Soy for November delivery were little changed at at US$13.86 a bushel in Chicago.
Earlier corn futures gained on speculation that hot weather in the US Midwest would curb production and wheat rose on expectations wet weather would delay the harvest in the EU producer of a fifth of the grain in world.