Wheat fell the most in two weeks on signs that importers are shunning U.S. grain in favor of cheaper supplies from competing exporters.
Egypt, the world’s largest importer of the grain, bought 180,000 metric tons of Russian wheat at a tender today for $178.50 a ton, said Nomani Nomani, the vice chairman of the state-owned General Authority for Supply Commodities. Wheat at ports near New Orleans yesterday sold for $191.16 a ton, U.S. Department of Agriculture data show.
“We lost out again today,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “Cutting supplies back isn’t going to get you out of trouble. We need to see some demand.”
Wheat futures for July delivery fell 10 cents, or 2.1 percent, to $4.5775 a bushel on the Chicago Board of Trade, the biggest drop since May 13. That pushed the commodity’s weekly decline to 3 percent and the drop for May to 9 percent.
The most-active contract has declined 27 percent in the past year because of reduced demand for U.S. grain and rising global stockpiles.
As of May 20, U.S. exports totaled 21.2 million tons in the marketing year that ends May 31, down 17 percent from a year earlier, USDA data show.
Futures also declined on expectations that warm, dry weather forecast for the U.S. southern Great Plains for the next week will dry out fields saturated by two months of heavy rains, Leffler said.
“We’re going to see some harvesting by end of this weekend in Texas and Oklahoma,” Leffler said. “We probably have less than 10 days until harvest starts in southern Kansas.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.