US wheat futures fall to one-week low

US wheat futures fell 4 percent to their lowest level in a week on Wednesday on a wave of technical selling after Egypt bypassed US supplies in its latest purchase, traders said. "I think its a technical blow-off," said Mike Krueger, president of The Money Farm, a grain market advisory service near Fargo, North Dakota. "When wheat goes, it goes in a hurry. It is running into these sell stops and it just blows right through them."
Corn also fell, following the sharp drop in wheat. Pressure from the upcoming harvest of what is expected to be a bumper crop added additional weight. Soybeans edged higher, with short covering supporting the market after Tuesday's decline.
Egypt, the world's top buyer of wheat, said on Wednesday morning it bought 240,000 tonnes of wheat from France and Canada. US supplies were roughly $20 per tonne too expensive for Egyptian buyers. The export market had shunned US wheat for much of the year due to relatively high prices but interest in US supplies has picked up since early July as drought in Russia threatened to reduce the size of the crop produced there.
Chicago Board of Trade September wheat futures closed down 27 cents at $6.47-3/4 a bushel. The drop pushed the benchmark contract to its lowest level since hitting $6.45 on August 18. Deferred contracts also tumbled, and traders said some sell stops in wheat futures were hit after the December contract fell below $7 a bushel, keying further declines.
Wheat's recent run-up to a 13-month high of $8.41 a bushel has triggered a sharp reaction on the downside. Price have fallen about 22 percent from their peak after the rally made wheat much more expensive than corn. CBOT corn for September delivery ended down 1/2 cent at $4.04-3/4 a bushel while CBOT September soybeans rose 1-/2 cent to close at $10.00 a bushel.
Corn prices were held up better than wheat on hopes that higher meat prices and ethanol blending margins could limit losses from the harvest pressure. "Margins in producing ethanol are now profitable, given the decline in corn prices," said Garry Booth, a trader at MF Global Australia. "And there was a sharp rally in the animal products division - pork, hogs and cattle prices have moved sharply higher and of course it helps feed ingredients such as corn and soyameal." *Front month contracts. CBOT contracts in cents per bushel except soyameal (dollars per ton), soyaoil (cents per lb) and rice (dollars per hundredweight). Paris wheat in euros per tonne.