Wheat Extends Slide as U.S. Says Export Sales Declined to a Nine-Week Low
Wheat fell for a third straight day, touching the lowest price in a week, after a government report showed a slump in export sales from the U.S., the world’s largest shipper.
U.S. exporters sold 319,599 metric tons in the week ended Sept. 9, the lowest total since July 8, the U.S. Department of Agriculture said today. Egypt, the largest importer, yesterday bought 295,000 tons, mostly from France and Canada. Only 55,000 tons was from the U.S. Higher prices, which are up 54 percent in Chicago in the past year, may be deterring buyers.
“Export sales were very disappointing this morning,” said Tom Leffler, the owner of Leffler Commodities LLC in Augusta, Kansas. “This is quite a deviation from where we’ve been. It has to be a function of price.”
Wheat futures for December delivery fell 7.5 cents, or 1 percent, to close at $7.1925 a bushel at 1:15 p.m. on the Chicago Board of Trade. Earlier, the contracted touched $7.115, the lowest level since Sept. 9.
The price had surged as drought damaged crops in Russia and Ukraine, forcing importers to seek supplies from other exporting countries. The U.S. is the world’s biggest shipper of the grain, followed by Canada, Russia and Australia.
Australia’s wheat exports may jump to 18.4 million tons, the highest level in more than a decade, after rains boosted this year’s crop, the Australian Bureau of Agricultural and Resource Economics Bureau of Rural Sciences said on Sept. 14. Production in the country may total 25.1 million tons, up from 21.7 million a year earlier, the group said.
Futures also dropped today as planting progresses in the U.S. In Kansas, the biggest U.S. producer of winter wheat, 5 percent of the crop was seeded as of Sept. 12, according to the USDA.
Rain in the past week helped improve soil moisture ahead of planting. In some areas of the state, dry weather persists, Leffler said.
“Planting conditions vary,” Leffler said. “It’s dry in the western part of Kansas and eastern Colorado. But wheat is a plant that needs less moisture. That’s why we don’t plant corn, we have to plant wheat.”
Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.