KANSAS CITY — Signs of renewed foreign demand for U.S. wheat resulted in a late rally in wheat futures Tuesday afternoon and supported prices in overnight and early trading Wednesday.
Rumors of new foreign demand for U.S. wheat turned wheat futures from negative territory to close higher in old crop months on Tuesday. Wheat futures had been pressured earlier in the day by sharply lower soybean futures prices after China cancelled a 300,000-tonne purchase of U.S. soybeans. But a number of reports of new tenders and tightening wheat stocks from other suppliers supported talk that led to higher wheat futures prices late Tuesday and early today. Wheat futures were trading about 6c a bu higher around 8:30 a.m. Central Time today on exchanges in Chicago, Minneapolis and Kansas City.
Today on its 24-hour reporting service, the U.S. Department of Agriculture said U.S. exporters sold 110,000 tonnes of hard red winter wheat to Egypt for delivery in the current 2012-13 marketing year that began June 1.
Egypt, typically one of the largest buyers of U.S. wheat, said Tuesday it would tender today for a minimum 55,000 tonnes of soft and/or milling wheat for delivery Feb. 11-20. The wheat may be sourced from several countries, including the United States, although overnight talk in the trade suggested Canadian soft wheat may be favored over U.S. soft wheat.
Also Tuesday, Japan said it would seek U.S. and Canadian milling wheat in its regular weekly tender on Thursday. Meanwhile, the Argentine government said it would limit wheat exports to 2 million tonnes during January and February, and reportedly has taken back wheat export license that would limit shipments for the year to 4.5 million tonnes from 6 million tonnes forecast earlier.Overnight, the Taiwan Flour Mills Association floated a Dec. 21 tender for 75,600 tonnes of U.S. wheat. And trade reports indicated Bangladesh planned to increase the pace of wheat purchases in coming months due to shrinking inventories and tightening supply from Ukraine suppliers. But much of the Bangladesh supply may come from India, which indicated it would have more wheat to export this year.