Feb. 25 (Bloomberg) -- Wheat fell from a two-month high after Egypt canceled purchases of the grain from the U.S., the world’s biggest exporter. Corn dropped, and soybeans rose.
Egypt, the top importer, canceled orders for 110,000 metric tons of soft, red winter wheat for delivery before June 1, the U.S. Department of Agriculture said today. The cancellation accounts for almost 80 percent of the remaining orders for the variety that Egypt had committed to purchase. The country is preparing to name a new government after the military-backed interim cabinet abruptly resigned yesterday.
"The Egyptian cancellation was a surprise," Sid Love, the president of Joe Kropf & Sid Love Consulting Services in Overland Park, Kansas, said in a telephone interview. "It also raises new concerns about the stability of the government and it’s ability to pay for imports."
Wheat futures for May delivery slumped 0.6 percent to $6.135 a bushel at 10:27 a.m. on the Chicago Board of Trade. Prices earlier touched $6.20, the highest for a most-active contract since Dec. 19.
Prices through yesterday rose 11 percent this month on concerns that U.S. crops may have been damaged by cold weather this year. Export sales fell for a third straight week to 425,500 tons in the week ended Feb. 13, USDA data show. World stockpiles are forecast to rise 4.5 percent to 183.7 million tons before the start of this year’s harvest.
"We aren’t doing much export business after the recent rally in prices," Love said. "On a world basis, there is enough wheat to go around.
Corn futures for May delivery dropped 0.3 percent to $4.565 a bushel, the third consecutive decline.
Soybean futures for May delivery gained 0.3 percent to $13.7875 a bushel, after touching a five-month high of $13.8075.
--Editors: Millie Munshi, Steve Stroth
To contact the editor responsible for this story: Millie Munshi at [email protected]