Wheat hits 3-wk low on supply pressure, soy falls from 6-wk top

imageSINGAPORE: US wheat lost more ground on Wednesday, falling for four out of six sessions and to its lowest in three weeks as expectations of bumper global production weighed on the market.

Soybean prices slid from Tuesday’s six-week top on hopes that Brazilian authorities would soon take action to end a trucker strike that has disrupted supplies and is threatening to shift demand to the United States.

The decline in US wheat futures came even as Egypt bought US cargoes.

“There was some interest in the wheat market because of anticipated purchase of US wheat by Egypt,” said Phin Ziebell, an agribusiness economist at National Australia Bank. “But in the current environment we are looking at a very good crop in 2014/15. It is a buyer’s market.”

Chicago Board of Trade March wheat had slid 0.8 percent to $ 5.01-1/2 a bushel by 0237 GMT – the lowest since Feb. 3. March soybeans lost 0.4 percent to $ 10.12 a bushel, while corn gave up 0.1 percent to $ 3.77 a bushel.

Egypt’s GASC bought 290,000 tonnes of US hard red winter wheat in its American-only tender using $ 100 million of US government-backed credits.

Soybean prices have been buoyed by the threat of supply disruption from Brazil which is in the middle of harvesting a record crop.

Brazilian truck drivers protesting high fuel prices for a seventh day on Tuesday interrupted supplies of diesel and raw materials across the country and threatened to hold up grains exports at ports.

Rain across northwestern Brazil, the largest soybean production area, was stalling harvests and also keeping the supply pipeline thin.

But soybeans have came off their highs amid reports the Brazilian government was fining truckers for blocking the roads, a sign the strike may be ending, traders said.

There is additional pressure on soybeans, with the rally in the futures market promoting US farmers to sell their stocks.

Basis bids for cash market soybeans fell in Iowa on Tuesday as a futures market rally sparked heavy farmer sales, providing elevators and processors with much-needed supplies, grain dealers said.

Copyright Reuters, 2015

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