Chicago | Reuters — U.S. wheat futures topped one-week highs on Friday on hopes for improved export demand after sales to Egypt, while corn and soybean futures slumped.
Egypt’s state grain buyer, the General Authority for Supply Commodities, said it bought 240,000 tonnes of wheat in an international purchasing tender on Thursday, with half of that coming from the U.S.
Egypt also bought 60,000 tonnes of Russian wheat and 60,000 tonnes of Romanian wheat in the tender, which closed when U.S. markets were shut for the Thanksgiving holiday.
The results indicate that U.S. wheat has become competitively priced on the global market, after being too expensive, traders said. It was the second consecutive tender in which Egypt, the world’s biggest wheat importer, bought U.S. wheat.
Tightening grain supplies in Russia, the world’s largest wheat exporter, could continue to support demand for U.S. wheat, analysts said.
“Our wheat prices have become competitive into some markets,” said Arlan Suderman, chief commodities economist for U.S.-based broker INTL FCStone.
The most active wheat contract reached $5.16 a bushel on the Chicago Board of Trade, its highest price since Nov. 13, before paring gains to close up 1/2-cent at $5.07-1/4 (all figures US$).
Most-active corn set a seven-week low before ending down 2-3/4 cents at $3.59 bushel. Soybeans slipped two cents to close at $8.81 a bushel.
Pressuring soy prices was uncertainty about the potential for the U.S. and China to make progress to resolve a trade war at the upcoming G20 leaders’ summit in Buenos Aires, traders said.
China is the world’s largest soybean importer, and the oilseed is the largest U.S. agricultural export to the Asian country. However, retaliatory Chinese tariffs against U.S. soybeans have stalled trade, threatening to leave a bumper U.S. harvest piled up in storage or rotting in fields.
China has been buying Brazilian soybeans during the trade war and may be able to continue avoiding U.S. soy due to an early harvest in South America.
Brazilian soybean farmers in the key state of Mato Grosso may start harvesting their next crop before the end of December, agribusiness consultancy AgRural said.
“With burdensome U.S. soybean stocks, the only real positive hope for the soybean market is that those trade negotiations go well,” said Tomm Pfitzenmaier, analyst for Summit Commodity Brokerage in Iowa.
— Tom Polansek reports on agriculture and commodity markets for Reuters from Chicago.