Chicago wheat futures soared more than 2 percent early on Thursday amid expectations that world's No. 4 exporter Russia could soon run out of supplies, forcing some demand to shift to the United States, the top shipper of the grain. The expectations stemmed from a large purchase of wheat from the Black Sea region, including Russian, by Egypt's main state-run wheat buyer, the General Authority for Supply Commodities, better known in trade circles by its acronym GASC.
While the purchase of 475,000 tonnes of wheat from Russia, Romania and Ukraine at an international tender highlighted how high prices had made US supplies uncompetitive, it also raised the question if Egypt, the world's top wheat importer, was trying to grab as much Russian wheat as possible before any move by Moscow to limit sales - as persistently speculated.
Russia has repeatedly denied that it would ban exports - like it did in 2010 after a historic drought and sparking a major rally in prices - due to a poor crop this year. Analysts said that Russia could run out of supplies for the export market if it maintains its current pace of sales - it has sold Egypt's GASC 840,000 tonnes of wheat in the agency's five back-to-back tenders that began August 10.
"Russia could be out of the market by the end of October," said grains analyst Dan Basse of AgResource Co in Chicago whose has clients in the Black Sea region. "People could be forced to buy from the United States or Canada." December wheat futures at the Chicago Board of Trade were up 2.3 percent at $8.86-1/4 by 11:54 a.m. Central (1654 GMT), with the market adding to earlier gains after the GASC tender results were announced.
Paris wheat futures were up 0.6 percent at 261.5 euros per tonne. CBOT November soyabeans were down 0.3 percent at $17.42-1/2 per bushel, while December corn was up 1 percent at $7.98. Soyabean futures fell for a second consecutive session on expectations that recent rainfall had helped to recoup some losses from the worst drought in half a century.
There were some expectations for the USDA to raise its estimate of the soyabean yield in its next update of the crop in its supply-demand report on September 12. Soyabean futures were also weighed by a sharp drop in prices in the cash markets before the Midwest harvest gets underway and on expectations that farmers will step up sales.
Closely-followed trade house INTL FC Stone on Wednesday pegged the 2012 US soyabean crop at 2.739 billion bushels, above the US government's forecast for 2.692 billion. However, the firm pegged corn output at 10.607 billion bushels, below the government forecast for 10.779 billion.
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