Oct. 24 (Bloomberg) -- Wheat erased gains in Chicago after India issued a tender to export the grain, signaling more supplies for the livestock industry.
India State Trading is seeking to export 120,000 metric tons of milling wheat from Mundra port during Nov. 24-Dec. 20, according to a notice on its website today. The grain rallied to a four-month high on Oct. 21 on speculation that crop damage in Russia and Argentina would boost demand for U.S. supply.
“India’s wheat is likely to be assigned a significant discount because of potential quality concerns and question marks over how many tenders they will be eligible for,” said Kieran Walsh, a broker at Aurel BGC in Paris. “They’ve potentially got 30 million tons of this.”
Wheat for December delivery dropped 0.3 percent to $6.995 a bushel at 7:36 a.m. on the Chicago Board of Trade. Prices earlier today climbed 0.9 percent. Corn declined 0.3 percent and soybeans fell less than 0.1 percent.
Milling wheat futures slumped 1 percent in Paris.
Wheat futures cost $2.6425 a bushel more than corn on Oct. 18, the most since September 2010.
“Wheat now looks fully valued against corn,” Paul Deane, senior agriculture economist at Australia & New Zealand Banking Group Ltd. in Melbourne. “We now view the price premium wheat has built over corn as high enough in limiting milling wheat sales into the animal feed sector.”
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