Aug. 14 (Bloomberg) -- Wheat futures capped the biggest three-session slump in 14 months on signs that this year’s drought-fueled rally is eroding demand for grain from the U.S., the world’s largest exporter. Corn and soybeans declined.
Egypt, the largest wheat importer, said today it bought 60,000 metric tons from Russia at $313 a ton and an equal amount from Ukraine at $313.88 a ton. Cargill Inc. had offered to sell U.S. supplies for $344.53 a ton, according to two traders with direct knowledge of the tender. Wheat futures rose as much as 51 percent since mid-June as drought damaged crops.
“U.S. wheat is not competitive on the world markets,” Roy Huckabay, an executive vice president for the Linn Group in Chicago, said in a telephone interview. “Wheat’s premium to corn will also slow demand from domestic livestock producers.”
Wheat futures for December delivery slumped 2 percent to close at $8.5825 a bushel at 2 p.m. on the Chicago Board of Trade. The most-active contract dropped 7.4 percent since Aug. 9, the biggest three-session slide since June 2011. Wheat is a substitute for corn in animal-feed rations.
The grain also fell because rain may improve conditions for crops in Australia, Argentina and parts of the southern U.S. Great Plains, Huckabay said.
Above-average moisture may fall in parts of Nebraska, Kansas and Missouri from Aug. 19 to Aug. 23, boosting soil moisture for planting winter-wheat crops, Commodity Weather Group LLC said in a report today.
Corn futures for delivery in December fell 0.4 percent to $7.89 a bushel in Chicago, capping a three-day drop of 4.2 percent. The most-active contract reached a record $8.49 on Aug. 10, after the government said the worst U.S. drought since 1956 reduced yields to the lowest since 1995.
Soybean futures for July delivery slid 0.2 percent to $15.98 a bushel on the CBOT. The price touched a record $16.915 on July 23.
Corn is the most valuable U.S. crop, followed by soybeans, hay and wheat, USDA data show.
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