Spot basis bids for wheat fell sharply in the US Midwest on Wednesday because processors and elevators were well-supplied following heavy farmer selling in the past week.
Spot bids for corn and soyabeans were mixed at interior locations around the region, with some dealers raising bids slightly to try to generate country movement.
Dealers expected sales to be slow on Wednesday because cash prices were below levels reached last week. Most farmers had taken care of their immediate cash-flow needs and were waiting for higher prices before selling.
Farmers were waiting for cash prices to rise to more than $2.50 per bushel for corn and $6.00 for soyabeans before booking any sales in the cash market, dealers said.
Dry weather around the region was allowing farmers to resume planting tasks that had been delayed by muddy conditions.
Cash bids for wheat fell by 20 cents per bushel in Cincinnati, Ohio. Wheat bids have dropped sharply around the US Midwest as the futures market has rallied to 3-1/2 year highs on fears of hot and dry weather damaging the US crop.
Farmers have been heavy sellers of wheat on the rally, booking sales for as far out as 2008 to take advantage of the elevated prices.
Some processors and elevators have even stopped buying wheat in the cash market. Some dealers have booked enough wheat sales to last until January.
Demand for US wheat is falling overseas due to the high prices, which also is contributing to the weakening of the wheat basis around the Midwest.
US soyabeans were also too expensive for the export market. South American countries like Brazil and Argentina are dominating the export market as they finish up their harvests.
At the Chicago Board of Trade, wheat futures were called 1 to 3 cents per bushel lower on follow-through selling after a weak close on Tuesday.
CBOT soyabean futures were called 1 cent to 2 cents per bushel higher on a bullish estimate for soyabean acreage. Informa Economics predicted 2006 US soyabean acres at 75.3 million, below the US Agriculture Department's forecast, trade sources said.
CBOT corn futures were called steady to 1 cent per bushel lower due to favourable growing weather.
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