US wheat futures shed 1.3 percent on Wednesday, pressured by worries that the recent run-up in prices to a two-month high would make supplies from the United States less competitive in global markets. Soyabean and corn futures each were narrowly higher, after notching new five-month peaks as rain delays to the harvest in South America kept the United States as the top export market for now.
Chicago Board of Trade March wheat was down 8 cents at $6.07 per bushel. Futures were on pace for the second straight session of lower prices in the wake of an announcement on Tuesday that top wheat importer Egypt cancelled a purchase of two cargoes of US wheat. "We've exhausted buying interest and there's concerns that we could be pushing demand away from the market, especially on the export side," Jefferies Bache analyst Shawn McCambridge said of wheat futures.
"We could get a disappointing number tomorrow. End users are not willing to chase the market higher," McCambridge added, referring to the US Agriculture Department's weekly grain export data release due early on Thursday. CBOT March soyabeans were up 3 cents at $14.02 per bushel while March corn gained 1/2 cent to $4.56-1/4 per bushel as of 11:13 am CST (1713 GMT).
"Despite this time of the year when overseas buyers should be eyeing the South American record harvest, the focus is still on US soyabeans supplies," said Vanessa Tan, investment analyst at Phillip Futures in a market note. "This is because South America is dealing with harvest delays of the region's record large crop." In another report Brazil may harvest a record 7.33 million tonnes of wheat later in 2014, as prices are likely to spur farmers to expand planting by 13 percent from 2013, local crop analysts Safras e Mercado said on Wednesday. The area planted is expected to reach between 2.19 million and 2.47 million hectares (5.41 million and 6.10 million acres) this season. Planting will begin in the coming months. "Among the principal motives pointed out by wheat farmers: attractive prices, improvements in yields and a greater acceptance of national wheat by Brazilian flour mills," Safras' wheat analyst Elcio Bento said in a report.
Brazil in recent years has been one of the world's biggest importers of wheat, shipments of which have traditionally come from Argentina due to favourable Mercosur terms of trade. But Argentine output has suffered in recent years due to bad weather and government restrictions on exports, forcing Brazil to open up import quotas to North American imports of the grain.
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