Wheat slips again on ample supply, export competitionPARIS/SINGAPORE - Chicago wheat eased on Thursday to add to heavy losses in the previous session as signs of rising U.S. supply and strong export competition outweighed weather concerns.
By: Gus Trompiz and Naveen Thukral, Reuters
PARIS/SINGAPORE - Chicago wheat eased on Thursday to add to heavy losses in the previous session as signs of rising U.S. supply and strong export competition outweighed weather concerns.
Corn and soybeans were little changed after pulling back from six-month highs a day earlier, as lower-than-expected supply estimates from the U.S. government this week continued to underpin the market.
Chicago Board of Trade front-month wheat was down 0.9 percent at $5.82 a bushel by 1205 GMT. It tumbled 4.4 percent on Wednesday, retreating from a six-month high linked to adverse crop weather in the United States and other major producers.
Analysts said attention had turned back to higher-than-expected official estimates of U.S. wheat stocks and sowings issued on Tuesday, which were initially shrugged off by the wheat market that focused on weather risks and a rally in corn and soybeans.
"This was clearly the price's response, delayed by one day, to the U.S. inventory and acreage figures published on Tuesday by the U.S. Department of Agriculture (USDA)," Commerzbank analysts said in a note regarding the pullback in wheat.
A tender announced on Wednesday by Egypt, the world's largest wheat importer, also underlined tepid demand for U.S. wheat against cheaper European and Black Sea origins.
Egypt's state buyer GASC has tendered to buy wheat for August shipment, with results expected later on Thursday. The United States has not been competitive in recent tenders from Egypt and it was not expected to be in contention this time.
The market will also get an demand indicator in weekly U.S. export sales due at 1230 GMT.
Wheat markets rallied last month on concerns about damage to U.S. wheat from heavy rain and crop stress in Canada and Europe from dry, hot conditions.
Wet weather had also supported corn and soybean prices, which then got a further boost from Tuesday's USDA data that showed lower-than-expected stocks for the crops.
Front-month soybeans inched up 0.1 percent to $10.45 a bushel. Spot corn edged down 0.2 percent to $4.13 a bushel after trading slightly higher earlier.
Large global supply, particularly in rival exporting countries in South America, would keep a cap on corn and soybean markets, analysts said.
"There are a few questions marks on U.S. crops as far as acres and yields are concerned," said Brett Cooper, senior manager for markets at FCStone Australia.
"But you still have big global stocks (and) South American soy products are far cheaper than U.S."