Wheat futures slumped to a three-week low as a canceled order by Egypt, the world’s largest importer, signaled buyers may be balking at prices that last month were at the highest level since 2008.
Egypt canceled purchases of 220,000 metric tons, and unknown buyers halted an additional 275,000 tons, the U.S. Department of Agriculture said today in a report. The grain was for delivery in the marketing year that starts June 1, 2011. Wheat futures in Chicago have plunged 20 percent since reaching a 23-month high of $8.68 a bushel on Aug. 6.
“The exports have been disappointing the past two weeks,” said Larry Glenn, an analyst at Frontier Ag in Quinter, Kansas. “There have been some sizeable cancelations.”
Wheat futures for December delivery fell 22.5 cents, or 3.1 percent, to close at $6.9725 a bushel at 1:15 p.m. on the Chicago Board of Trade. The price earlier touched $6.93 a bushel, the lowest level since Sept. 1.
The commodity has jumped 29 percent this year after excessive rain in Canada prevented farmers from seeding grain and a drought damaged crops in Russia, which imposed an export ban on Aug. 15. The U.S. is the biggest shipper of wheat, followed by Canada and Russia.
The U.S. crop will increase to 2.224 billion bushels in the year through May 31, from 2.216 billion in the previous year, according to a report today from researcher Informa Economics Inc. The government forecast the crop at 2.265 billion bushels earlier this month.
Rainfall in the past 48 hours has improved soil moisture in parts of Kansas, the biggest producer of winter varieties, as farmers prepare for planting after harvesting corn, Glenn said. The winter-wheat crop is collected in May and June.
“It’s not ideal moisture, but they’ll get the crop in the ground,” Glenn said. “They’ll plant a fair amount of wheat behind the corn, more than last year when it was wet in our area.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.