Wheat will rebound after slumping the most in three weeks today as riots erupted in Egypt, the world’s biggest buyer, because other countries need to replenish stockpiles, said Roy Huckabay from the Linn Group in Chicago.
“Political strife always adds an element of uncertainty,” Huckabay, an executive vice president at the broker, said in an e-mail. “What it did today was cause some long liquidations in grains. This will not last, there remains too many that need to buy on weakness to extend coverage.”
Wheat declined 2.4 percent to $8.2575 a bushel on the Chicago Board of Trade, the steepest drop since Nov. 16, and futures traded on the Kansas City Board of Trade retreated 2.2 percent to $9.12 a bushel, the most since Dec. 14.
Egyptian protesters clashed with police throughout the country and into the night, defying a curfew and setting fire to some buildings, in the biggest challenge to President Hosni Mubarak’s 30-year rule. The country was expected to import 9.8 million metric tons of wheat in the 12 months through June, 58 percent more than the next bigger buyer, Brazil, according to U.S. Department of Agriculture estimates. The U.S. is the world’s biggest wheat exporter.
“The wheat market is down, so the initial vote is the fear of less business,” said William Fordham, the president of C&S Grain Market Consulting in Henning, Illinois. “In the long run, however, the only way to appease angry and hungry people is a change in government and more food.”
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