Wheat Rebounds From 13-Month Low as Decline Attracts Importers

July 26th, 2013

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Category: Grains, Oilseeds

(Bloomberg) – Wheat rose in Chicago after four sessions of declines, rebounding from a 13-month low amid signs lower prices lured buyers. Corn slipped.

U.S. export sales of wheat were 661,379 metric tons last week, the Department of Agriculture reported yesterday, above the 350,000 to 600,000 tons expected by analysts. The European Union issued export licenses for 435,334 tons of soft wheat in the week through July 23, the most since April.

“The wheat market still has tremendous bearish potential,” Clement Gautier, wheat analyst at Horizon Soft Commodities in Noisy-le-Grand, France, said by phone. “The market is taking a pause for breath.”

Wheat for delivery in September added 1 percent to $6.5575 by 5:55 a.m. on the Chicago Board of Trade after closing yesterday at the lowest price since June 18, 2012. The grain is down 1.3 percent this week, set for a second drop in a row. Milling wheat for delivery in November traded on NYSE Liffe in Paris gained 0.3 percent to 189 euros ($250) a ton.

“It has attracted buyers, but also woken up the sellers,”Gautier said of the price decline. “Yesterday we saw numbers that were not bad for the U.S. There is a return of demand, there are purchases.”

Egypt, the world’s largest grain importer, this week bought 240,000 tons of wheat from Russia, Romania and Ukraine in its third tender this month.

Corn, Soybeans

Corn for delivery in December fell 0.1 percent to $4.785 a bushel in Chicago, set to drop 4.4 percent this week. The grain yesterday reached $4.7525, the lowest price since Oct. 5, 2010.

Soybeans for delivery in November were little changed at $12.2425 a bushel after earlier reaching a 17-month low of $12.0725. The oilseed is set for a 3.9 percent drop this week.

The Standard & Poor’s GSCI Index of eight agricultural commodities tumbled 17 percent this year as soybeans slumped 13 percent, corn lost 31 percent and wheat retreated 16 percent on expectations harvests will climb. World corn production may be a record 959.8 million tons, global wheat output may be an all-time high of 697.8 million tons and soybean stockpiles may reach 74.1 million tons, the largest ever, the USDA predicts.

“The combination of slower U.S. soybean and meal exports and excellent Northern Hemisphere oilseed production prospects – – both soybeans and canola — remains the major bearish influences on oilseed prices,” Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, wrote in a report e-mailed today.

Canola futures touched a 33-month low in Winnipeg yesterday on signs of slowing global demand and improving prospects for the crop in Canada. U.S. soybean exports in the week through July 18 fell 32 percent to 82,231 tons, the USDA said yesterday. Exports of soybean meal totaled 58,727 tons in the week and soybean-oil shipments were 889 tons, USDA data show.

No hot weather is forecast in the U.S. Midwest for the next 10 days, favoring crops that are in critical stages, DTN said yesterday. Soybean output in the U.S., the largest grower, will rise to a record 3.42 billion bushels, the USDA forecasts.

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