(Reuters) – Chicago wheat futures fell on Thursday, extending the prior session’s losses, weakened by concern that U.S. supplies are no longer competitive in global markets.
Soybean prices advanced, boosted by tightening U.S. supplies as rains delayed the flow of supplies from South America, while corn futures were slightly lower.
Chicago Board of Trade May wheat futures fell 0.4 percent to $6.03-1/4 a bushel by 1203 GMT, having closed down 2.02 percent on Wednesday, the biggest daily fall since Jan. 29.
Prices had been rising earlier this month on adverse crop weather in the U.S., culminating in the May contract peaking at $6.20 on Tuesday, a two-month high.
Concerns over a shift away from U.S. wheat were triggered when Egypt cancelled 110,000 tonnes of soft red winter wheat this week, a decision likely having more to do with rising U.S. prices than with political turmoil within the world’s top wheat importer, grain traders said.
“U.S. supplies are not economically competitive at the moment, you can see that with Egyptian cancellations the other day,” said Andrew Woodhouse, grains analyst at Advance Trading Australasia.
Egypt’s main wheat-buying agency, the General Authority for Supply Commodities, set a tender on Wednesday to buy an unspecified amount of wheat from global suppliers for shipment March 15-31.
Argentina’s decision to clear an additional 500,000 tonnes of wheat for export was also expected to reduce demand for U.S. supplies.
EXPORT SALES REPORT
Market attention will turn to the U.S. Department of Agriculture’s latest weekly export figures, due 1330 GMT, for further signs of a movement away from U.S. supplies.
Analysts expect the USDA to report sales of between 300,000 and 500,000 tonnes for the week ended Feb. 20.
Wheat futures in Paris were also lower with May off 0.50 euros or 0.25 percent at 197.00 euros a tonne.
CBOT soybeans were higher as delays to the flow of beans from South America further tightened U.S. supplies.
“Heavy rainfall in South America is making it difficult for the soybeans supplies to be transported to the export market,” Phillip Futures said in a market update.
“Until South America can get its supplies to the export market effectively, the focus will likely to remain on U.S. soybeans,” the report added.
May CBOT soybeans rose 0.6 percent to $14.05-1/4 a bushel.
CBOT corn prices were lower with May off 0.4 percent at $4.59 a bushel.
Dealers said the corn market was currently range bound with demand remaining strong but supplies also plentiful following last year’s huge U.S. harvest.
