BLBG:Wheat Declines as Egypt Purchases Russian Grain, Shunning U.S. and Europe
Wheat fell in Chicago after three days of gains as Egypt, the world’s biggest importer of the grain, shunned U.S. and European Union crops in favor of less expensive Russian supplies.
Egypt bought 180,000 metric tons of Russian milling wheat at a tender yesterday for prices from $284.17 to $290 a ton, said Nomani Nomani, vice chairman of the state-run General Authority for Supply Commodities. A ban on all cereal exports from Russia expired July 1 as scheduled.
“Russian grain is still relatively cheap and convenient, but there is political determination not to rely too heavily” on imports from the country, said Justine White, an analyst at VM Group in London.
Wheat for December delivery dropped 5.25 cents, or 0.7 percent, to $7.7925 a bushel by 11:39 a.m. London time on the Chicago Board of Trade. Milling wheat for November delivery traded on NYSE Liffe in Paris fell 1 euro, or 0.5 percent, to 206.75 euros ($298.88) a ton.
Russia barred exports last year after the nation’s worst drought in a half-century cut production, causing the wheat harvest to plunge 37 percent from 2009. Egypt also has purchased Romanian wheat since the ban ended.
“This disruption in supply hit Egypt very hard,” White said. “I think they are likely to diversify their sources after that experience.”
Corn, Soybeans
Corn for December delivery declined 2.75 cents, or 0.4 percent, to $7.4075 a bushel in Chicago. Soybeans for November delivery slid 2.75 cents, or 0.2 percent, to $13.945 a bushel.
Prices also slipped as German business confidence fell more than estimated by analysts in a Bloomberg News survey. “Weak” prospects for economic growth in Japan, the top global corn importer, caused Moody’s Investors Service to cut the country’s debt rating. Futures indicated U.S. equity benchmarks will retreat when trading starts in New York.
“The weakness seen this morning is not due to any change in the fundamental outlook, which remains strong, but likely a result of pressure from continuing weakness in external markets,” White said.
To contact the reporters on this story: Luzi Ann Javier in Singapore at ljavier@bloomberg.net; Tony C. Dreibus in London at tdreibus@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
