BLBG:Wheat Snaps Slump as Egypt Issues First Tender Since February
Wheat rose for the first time in nine days in Chicago, snapping the longest slump since 2005, after the world’s top importer Egypt said it plans to purchase the grain. Prices also increased in Paris.
Egypt is seeking to buy at least 60,000 metric tons today, its first tender since February, the country’s state-run buyer said yesterday. Egypt, which accounts for about 6 percent of the world’s wheat purchases, has struggled to pay for food and fuel as foreign currency reserves dwindled amid social unrest. Futures slid 8.3 percent in the previous eight sessions, 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 September delivery rose 1.7 percent to $6.666 a bushel at 5:41 a.m. on the Chicago Board of Trade. Prices had dropped on speculation that world supplies would rebound as the Northern Hemisphere harvest starts.
In Paris, milling wheat for November delivery gained 1 percent to 196 euros ($255.29) a ton on NYSE Liffe.
Grain Stockpiles
Egypt’s cabinet said June 26 that the country’s wheat stockpiles would be sufficient to meet demand until Nov. 17. The government bought 3.53 million tons of domestic wheat as of 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.
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 December delivery rose 0.7 percent to $5.05 a bushel in Chicago. Earlier, prices fell to $5.0025, the lowest for a most-active contract since Oct. 8, 2010, after a USDA report yesterday showed that U.S. crop conditions improved. The contract for delivery in July, before the harvest, gained as much as 1.1 percent to $6.625.
Soybeans for November delivery rose 0.5 percent to $12.495 a bushel, after falling to $12.35, the lowest for a most-active contract since February 2012. Soybeans for delivery in July, before the harvest, were poised to gain for a seventh day after yesterday climbing to $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 while inventories declined, while production for both crops may rebound to a record in the next season, the government estimates. The USDA said June 28 that U.S. farmers planted the most corn acres since 1936, and the largest soybean area on record.
To contact the reporter on this story: Whitney McFerron in London at wmcferron1@bloomberg.net; Phoebe Sedgman in Melbourne at psedgman2@bloomberg.net
To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net
