Wheat Rises as Egypt Purchase Indicates Demand for U.S. Supplies

January 13, 2014 02:49 AM
wheat in the field

Wheat rose in Chicago, rebounding from a decline last week, after Egypt, the world’s biggest buyer of the grain, picked U.S. supplies in its latest tender.

Egypt on Jan. 11 agreed to buy 55,000 metric tons of U.S. soft red winter wheat at $303 a ton including freight costs, the country’s General Authority for Supply Commodities said. That’s GASC’s first purchase of U.S. wheat this season.

"The exports essentially explain the rebound for U.S. wheat," Arnaud Saulais, a broker at Starsupply Commodity Brokers in Nyon, Switzerland, wrote in an e-mailed reply to questions today.

Wheat for March delivery climbed 0.9 percent to $5.74 a bushel by 5:34 a.m. on the Chicago Board of Trade. Prices slumped to $5.605 on Jan. 10, the lowest since July 2010. Milling wheat for delivery the same month traded on NYSE Liffe in Paris advanced 1 percent to 195 euros ($266) a ton.

Jordan is tendering to buy 100,000 tons of wheat with results due Jan. 15, French farm adviser Agritel reported on its website today.

Corn for March delivery rose 0.5 percent to $4.35 a bushel, extending its 5 percent gain on Jan. 10 after the U.S. said production and reserves in the world’s biggest grower and exporter were smaller than forecast by analysts while global supply will climb.

U.S. farmers collected a record 13.925 billion bushels of corn last year, less than the 13.989 billion estimated in December and compared with 14.06 billion forecast by analysts in a Bloomberg survey, the U.S. Department of Agriculture said Jan. 10. The agency raised its estimate for global production 0.3 percent from December, it said.

U.S. production was cut "as a result of weaker yields" and corn consumption was revised higher with upgrades coming through in both the ethanol and livestock sectors, Luke Mathews, a commodity strategist at Commonwealth Bank of Australia, said in a report today. "Despite the positive surprise, the longer- term theme of increasing U.S. and world corn inventories remains intact."

Soybeans for March delivery slipped 0.4 percent to $12.74 a bushel.


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