Wheat Eases, Remains Close to 29-Month Peak


The following article is from Reuters:

U.S. wheat futures drifted lower on Friday, although prices remained close to this week’s 29-month highs reached on strong north African and Middle Eastern demand, while corn firmed towards recent peaks.

“Corn and wheat appear to be in a consolidation mode following strong gains earlier this month,” Barclays Capital said in a market note on Friday.

European dealers said sentiment on wheat remained constructive, buoyed partly by strong demand for key importers in North African and the Middle East, with price dips seen as buying opportunities.

“There only seems to be one view (on wheat) at the moment and that is go with the (bullish) trend,” one dealer said.

Chicago Board of Trade wheat for March delivery was off 4-1/4 cents or 0.5 percent at $8.42 a bushel at 1226 GMT. The contract rose to a peak of $8.63-1/2 on Thursday, the highest level for the front month since August 2008.

Dealers said they were waiting to see if continued unrest across North Africa, linked in part to rising food inflation, would lead to further demand for wheat.

“People are keeping an eye on events in the Maghreb and the Middle East,” a French dealer said. “Are they going to continue buying wheat to calm their populations?”

Iraq has tendered again for at least 100,000 tonnes more wheat from various origins, a tender which will probably result in at least some U.S. wheat purchased.


ther upcoming international wheat tenders could include Morocco and Saudi Arabia, which typically issues tenders twice or three times a year for very large volumes, traders said.


“I think the wheat market is looking forward to a Saudi tender which might provide support to the market but we have to see how much they buy,” said Adam Davis, a senior grains trader at Melbourne-based Merricks Capital.

Milling wheat prices in Paris were also slightly lower with March off 0.75 euros at 264.00 euros a tonne.

Corn prices were slightly higher and soybeans a shade lower as the market eyed weather in key producer Argentina.

“Weather has somewhat improved in Argentina for soybeans and corn. For the corn crop some damage is already done and rains will only help check further deterioration. The weather is favourable for production of beans,” Davis said.

CBOT March corn rose 0.6 percent to $6.54-1/2 a bushel. Prices peaked at $6.67 a bushel a week ago, the highest level for the front month since July 2008.

Dealers also continued to keep a close watch on port strikes in Argentina which began on Wednesday with exporters asking the government to intervene.

“A government response is expected soon, and if a period of compulsory conciliation is ordered, striking workers must go back to work while negotiations take place,” Barclays Capital said in a market note.

The Grain and Feed Trade Association (Gafta) has issued a strike notice to its members on three Argentine ports, European traders said on Friday.

“The notice means that parties concerned by this strike action, be they buyers or sellers, can claim under their contracts force majeure for grains and oilseeds shipments from these ports,” one European grain trader said.

CBOT March soybeans eased 0.1 percent to $13.97-3/4 a bushel.

© Thomson Reuters 2011

Posted by Haylie Shipp


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