By Joanna Levin
AGGRESSIVE bidding in France to supply wheat to Egypt is pressuring the US grain market.
France outbid the USA this weekend in an Egyptian tender for 250,000 million tonnes of wheat. The European seller who won the tender set a new low price for the year at $86/ tonne.
At the close of trade in Chicago yesterday, the September wheat price had fallen 4.75¢ from Friday to 260.5¢/bushel, down more than 15¢ on the week.
Many analysts predict that the global glut and increasingly aggressive pricing in international markets will force US exporters to lower their prices yet again.
The wheat market has suffered some of the biggest losses amongst Americas beleaguered agricultural commodities.
US farmers continue to enjoy ideal growing conditions for their winter and spring crops but prices appear to be falling almost daily. The September futures contract has plummeted from 370¢/bushel in early February.
The latest figures suggest 87% of the winter wheat crop has now been harvested, compared with only 82% this time last year. The spring crop is maturing well and 98% of spring wheat has already headed.
Nevertheless, weather forecasts point to suitable growing conditions in coming weeks and the market is suffering from poor export demand and a drop in world prices.