Wheat Drops in Chicago as Rival Producers Offer Cheaper Exports

Wheat fell the most in a week as demand slackened for grain from the U.S., the world’s biggest shipper, because rival producers offered cheaper supplies.

On April 6, Iraq agreed to buy 300,000 tons from Russia at $247 a ton and 150,000 tons from Canada at $273 to $279.75 a ton, Reuters reported. Only 50,000 tons of U.S. wheat for $278 a ton was purchased, the news agency reported.

“Prices will have to be lower and then have to sit there” before demand picks up for U.S. exports, said Jon Marcus, the president of Lakefront Futures and Options LLC in Chicago. “Prices are not attractive enough. If we got to $4.20 or $4.30 a bushel, without a doubt we’d see sales pick up.”

Wheat futures for July delivery fell 6.25 cents, or 1.3 percent, to $4.825 a bushel on the Chicago Board of Trade. The price has dropped 11 percent this year.

The commodity also fell as the dollar gained for the third straight session against a basket of major currencies, eroding the appeal of U.S. exports.

Wheat is the fourth-biggest U.S. crop, valued at $10.6 billion in 2009, behind corn, soybeans and hay, government data show.

Tony C. Dreibus
Source: Bloomberg