Wheat leads grains lower Tuesday
U.S. wheat futures fell Tuesday, as Egypt chose a source besides the U.S. to buy the grain and rain fell in Kansas.
Chicago Board of Trade September wheat fell 17 cents or 2% to $8.39 3/4 a bushel. Kansas City Board of Trade September wheat fell 16 cents or 1.8% to $8.52 a bushel. Minneapolis Grain Exchange September wheat fell 8 1/2 cents or 0.9% to $9.02 3/4 a bushel.
Wheat fell after Egypt bought the grain from the Black Sea region, creating disappointment that the country didn't buy U.S. supplies. Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, said Tuesday it bought a total of 120,000 metric tons of Russian and Ukrainian wheat for shipment Sept. 21-30.
The purchase was the second international tender in a week. GASC bought 120,000 tons of Russian wheat Saturday for delivery Sept. 10-20.
Wheat futures also fell due to unexpected rain in Kansas on Tuesday, said Sid Love, an analyst at Kropf & Love Consulting, an Overland Park, Kan., agricultural advisory firm. With the U.S. suffering its worst drought in decades, some analysts worry that dry soil in the southern Plains could reduce plantings of a new wheat crop there starting in September.
"There was surprise rain in Kansas today, and nobody had it forecast," Mr. Love said. Also, he said, "there are forecasts out there that say September is supposed to be wetter than normal in the southern Plains, and if that's the case, that would be ideal for the crop."
Pressure also continued from the U.S. Department of Agriculture on Friday forecasting greater U.S. wheat supplies than analysts had expected. The USDA forecast domestic wheat inventories at the end of the 2012-13 marketing year at 698 million bushels. Analysts had expected 681 million bushels.
Corn futures also fell Tuesday. Corn has been under pressure since the USDA on Friday projected domestic inventories in line with analysts' expectations, saying reduced demand will make up for supply tightness caused by the severe drought this year.
Lower wheat prices also pulled corn lower, as the two crops compete in the animal-feed market.
CBOT September corn fell 3 cents or 0.4% to $7.79 3/4 a bushel. Most-active December corn fell 3 1/4 cents or 0.4% to $7.89 a bushel.
Soybean futures ended mixed. November soybeans added to a decline made Monday on Midwest rains benefiting soy crops. Most other contracts rose due to a tight supply outlook overall.
A USDA report Monday showed slight improvement in condition ratings for the U.S. soy crop, combining with rain this week to raise hopes for better U.S. soy yields.
August soybeans, a thinly traded contract that expired Tuesday, settled up 23 3/4 cents or 1.4% at $16.80 a bushel. Most-active November soybeans fell 2 3/4 cents or 0.2% to $15.98 a bushel.