Russia, the world’s fifth-biggest wheat exporter, banned food imports from the U.S., European Union, Canada, Australia and Norway in retaliation for sanctions linked to the conflict in Ukraine, the ninth-largest shipper. In the week ended July 31, U.S. wheat sales fell 19 percent from a year earlier, according to government data. Futures rose 9.2 percent in the past six sessions on grain-quality concerns in Europe.
“The market only trades potential for a short time without news of improved demand,” Shawn McCambridge, the senior grain analyst for Jefferies Bache LLC in Chicago, said in a telephone interview. “If demand didn’t improve at lower prices, then it is unlikely to increase with higher prices, unless there is an unexpected escalation in tensions in Ukraine.”
Wheat futures for September delivery dropped 1.1 percent to close at $5.615 a bushel at 1:15 p.m. on the Chicago Board of Trade, snapping the longest rally since April 30. The U.S. is the top exporter.
Global food prices fell 2.1 percent in July from June, the Rome-based United Nations Food and Agriculture Organization said today.
World harvests of corn and wheat will be larger than expected a month earlier as prospects improve for crops from the U.S. to Russia, boosting global stockpiles to a 15-year high, the International Grains Council said on July 31.
“Global supplies are still big,” McCambridge said. “No one is rushing in to buy U.S. wheat. There is no sense of panic in world trade.”
Corn futures for December delivery dropped 0.8 percent to $3.7125 a bushel. The price has fallen 12 percent this year on prospects for a bumper crop in the U.S., the biggest producer.
Soybean futures for November(CBOT:ZSX4) delivery declined 0.2 percent to $10.78 a bushel.