By Michael Hirtzer
CHICAGO, Feb 25 (Reuters) – U.S. wheat futures fell 1.3 percent on Tuesday and were on track for their biggest loss in a month after top global wheat importer Egypt canceled purchases of two cargoes of U.S. grain, traders said.
Soybeans recovered from early losses to notch a new five-month high after a release from Washington confirmed a large U.S. sale of the beans, while corn futures traded lower for the third straight session.
Wheat was modestly higher in early dealings before the U.S. Department of Agriculture announced that Egypt canceled orders for 110,000 tonnes of U.S. soft red winter wheat for delivery in the current 2013-14 marketing season.
Read Also
U.S. livestock: Hog futures hit contract highs on shock herd decline
Chicago | Reuters – Lean hog futures stormed to contract highs at the Chicago Mercantile Exchange on Friday as smaller-than-expected…
The news sparked a bear-spreading sell-off, with CBOT March wheat shedding 8 cents to $6.09-3/4 per bushel while more-active May wheat eased 5 cents to $6.12 as of 10:36 a.m. CST.
“The cancellation to Egypt was a sign of what was going on. U.S. wheat on the rally just got too expensive so we’re taking it back down,” said Roy Huckabay, analyst at brokerage the Linn Group in Chicago.
USDA also announced a sale of 568,000 tonnes of U.S. soybeans to an unknown destination for delivery in the 2013-14 season.
The sale caught many traders by surprise. U.S. soybean supplies are very tight and global buyers typically turn their attention to cheaper South American supplies at this time of year. However, rains this week in the top Brazilian growing region of Mato Grosso halted harvest of what is likely a record crop there.
“This report this morning is unbelievable,” Huckabay said of the soybean announcement. “There were no bids on the PNW (U.S. Pacific Northwest) yesterday for rail beans by anybody for any period.”
CBOT March soybeans recovered from earlier losses following the announcement to turn three cents higher at $13.89-1/2 per bushel, the highest since Sept. 13.
CBOT March corn edged 1/2 cent lower to $4.51 per bushel, declining for the third consecutive session on forecasts of large global crops and expectations that Ukraine’s huge exports will not be disrupted by political upheaval.
“Corn is suffering from the expectations that forecasts of large crops in the United States will sharply expand supplies and inventories,” said Arnaud Saulais of Starsupply Commodity Brokers.
Fears that Ukraine’s political crisis could disrupt the country’s corn exports have diminished.
“Ukraine’s massive corn exports are not now thought likely to be disrupted by the major political upheaval in the country which will bring more export competition for U.S. corn,” one European trader said.
