Wheat Snaps Slump as Egypt Issues First Tender Since February

(Bloomberg) – Wheat rose in Chicago, snapping the longest string of declines in eight years, after leading global importer Egypt said it plans to purchase the grain.

Egypt is seeking to buy at least 60,000 metric tons today, its first tender since February, the state-run buyer said yesterday. The country, accounting for about 6 percent of world wheat purchases, has struggled to pay for food and fuel as foreign-currency reserves dwindled amid political upheaval and social unrest. Futures slid 8.3 percent in eight sessions before today, capping the worst run since June 2005.

“Prices have decreased sharply, so we’re not surprised to see buyers like Egypt come back in the market,” Arnaud Saulais, a broker at Starsupply Commodity Brokers, said by telephone from Nyon, Switzerland. “This could bring support in the short term.”

Wheat for delivery in September added 1.8 percent to $6.665 a bushel at 7:02 a.m. on the Chicago Board of Trade. Prices had dropped on speculation world supplies would rebound as the Northern Hemisphere harvest starts. In Paris, milling wheat for delivery in November gained 1.2 percent to 196.25 euros ($255.67) a ton on NYSE Liffe.

Egypt’s cabinet said June 26 national wheat stockpiles would suffice to meet demand until Nov. 17. The government bought 3.53 million tons of domestic wheat by June 15, up from 3.2 million tons at the same time in 2012, amid expectations that the country would harvest a record 9.5 million tons.

48 Hours

The U.S. Department of Agriculture estimates Egypt’s harvest at 8.8 million tons, with imports at 9 million tons. Egypt’s military issued a 48-hour ultimatum to President Mohamed Mursi yesterday to find a solution to the country’s political impasse.

Corn for delivery in December gained 0.6 percent to $5.0425 a bushel in Chicago. Prices earlier reached $5.0025, the lowest for a most-active contract since Oct. 8, 2010, after a USDA report yesterday showed crop conditions improved. The grain for delivery in July, before the harvest, climbed as much as 1.4 percent to $6.6475.

Soybeans for delivery in November rose 0.4 percent to $12.485 a bushel, erasing a drop as low as $12.35, the lowest for a most-active contract since February 2012. The oilseed for delivery in July, before the harvest, was poised to gain for a seventh session after yesterday reaching $16.0425, the highest for that contract since September.

Supplies from last year’s corn and soybean harvests were reduced by U.S. drought, boosting July futures as inventories declined, and production for both crops may rebound to records in the next season, the government estimates. The USDA said June 28 farmers in the nation planted the most corn acres since 1936 and the largest soybean area on record.