Forexpros – Wheat futures were down for third day on Wednesday, hovering close to a one-week low as increasing competition for U.S. wheat exports continued to weigh on market sentiment.
On the Chicago Mercantile Exchange, wheat futures for March delivery traded at USD6.0988 a bushel during European morning trade, shedding 0.51%.
It earlier fell by as much as 0.65% to trade at a daily low of USD6.0862 a bushel. Prices fell to a one-week low of USD6.0037 on Tuesday.
Wheat prices came under pressure after Egypt’s General Authority for Supply Commodities, the state’s main wheat buyer, said that it purchased 240,000 metric tons of the grain from Argentina at a tender on Tuesday.
It was the first Egyptian purchase of Argentinean wheat since February, as the Middle Eastern country, which is the world’s largest wheat importer, sought a cheaper alternative to U.S. supplies.
Last week, Argentina’s government approved an additional 2.7 million tonnes of wheat exports in the 2011-12 marketing season, boosting the total to 11.1 million tonnes.
Argentina is the world’s fifth largest wheat exporter. A favorable export outlook in the South American country could result in reduced demand for U.S. supplies, which is the world’s third largest wheat producer and biggest exporter.
However, prices found support after Japan said it was seeking nearly 108,375 tonnes of feed wheat from the U.S. and Canada via a regular weekly tender closing on Thursday.
Reports that Taiwan was seeking 82,750 tonnes of U.S. wheat in a tender closing on Friday also underlined prices.
Meanwhile, agricultural commodity traders continued to monitor developments out of the euro zone amid guarded optimism that this week’s European Union summit would result in a breakthrough on the region’s two-year-old debt crisis.
European leaders were to discuss proposed changes to EU treaties which would allow for greater fiscal integration and stricter enforcement of budgetary discipline in the single currency bloc.
Focus on the summit has intensified since ratings agency Standard & Poor’s placed 15 euro zone nations, including AAA-rated Germany and France, on review for credit downgrades due to the region’s deepening financial crisis.
Elsewhere on the Chicago Mercantile Exchange, corn for March delivery added 0.28% to trade at USD5.9888 a bushel, while soybeans for January delivery gained 0.4% to trade at USD11.3450 a bushel.
Forexpros
