US wheat futures tumbled as much as 2 percent on Wednesday, heading for their biggest daily losses in two weeks after top global wheat importer Egypt cancelled a tender seeking supplies from the United States. Overbought technical conditions also pressured prices, with corn and soybeans each falling more than 1 percent at the Chicago Board of Trade.
"When you have an oversupply or a strong supply, the path of least resistance is lower," Jefferies Bache analyst Shawn McCambridge said. CBOT wheat fell to session lows after news that Egypt's state grain buyer had cancelled a tender seeking US wheat for April arrival. US wheat is uncompetitive in many top export markets with cheaper grain shipped out of the European Union and the Black Sea region. However, Egypt released the rare tender seeking only US offers after the United States extended a credit line of $100 million to the country. Still, the cheapest US offer was roughly $60 per tonne more than the wheat Egypt bought earlier this month from France and Romania.
Most-active CBOT March wheat was down 9-3/4 cents, or 1.8 percent, at $5.25 per bushel as of 11:20 am CST (1720 GMT) while K.C. hard red winter wheat fell 2.2 percent. "We're reacting to the Egypt tender being cancelled; it's a reminder of how far out of the market we are," McCambridge added.
Wheat fell from the highest levels in a month while soybean futures drifted from a five-week peak reached earlier in the session. CBOT March soybeans were down 15 cents to $9.92-3/4 per bushel. CBOT March corn was 5-3/4 cents lower at $3.83-3/4 after touching a one-week high on Tuesday. South America is in the early phases of record-large soybean harvests while there still are plentiful supplies of both soybeans and corn after record US harvests last autumn.
"I remain fundamentally bearish on soybeans with a large Brazilian soy crop now arriving," said Stefan Vogel, head of agricultural commodity markets research at Rabobank. "After the Chinese and Asian Lunar New Year holidays we are likely to see significantly more Brazilian export activity." "Corn is currently drifting, with little new price-driving factors," Vogel said.
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