Futures Rise on Sales to China

Futures Rise on Sales to China
July 8, 2013, 10:16 a.m. ET.US Wheat
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--Continued fresh sales of U.S. wheat to China buoy prices

--Private exporters reported selling 840,000 metric tons of soft red winter wheat to China

--Wheat is still faced with seasonal pressure amid the harvest of winter wheat

By Andrew Johnson Jr.
CHICAGO--U.S. wheat futures are trading higher Monday, fueled by improved export demand.

Chicago Board of Trade futures for July delivery are up 6 1/2 cents, or 1%, at $6.62 1/2 a bushel. Kansas City Board of Trade July wheat is up 16 cents, or 2.4%, at $6.92 1/2 a bushel.

Wheat futures are rising on continued fresh sales of U.S. wheat to China that began last week.

The U.S. Department of Agriculture announced Monday private exporters reported selling 840,000 metric tons of soft red winter wheat for delivery to China during the 2013-14 marketing year. The news came after the USDA last week similarly said private exporters had sold 480,000 tons of wheat to China.

Demand for wheat to be exported and to be used in animal feed in the U.S. has been strong in recent weeks, leading traders to buy wheat futures. Some speculative traders are buying futures to book profits on earlier bearish bets on wheat.

"The sales to China are supporting wheat," said Shawn McCambridge, senior grains analyst with Jefferies Bache in Chicago.

"The sales are a signal that recent price declines have made U.S. supplies competitive in world markets."

"China wants high quality U.S. supplies to blend with their lower quality wheat from the Chinese harvest," Mr. McCambridge added.

However, wheat is faced with seasonal pressure as the harvest of winter wheat progresses in the U.S. The influx of supplies from a harvest often pushes futures prices lower.

The wheat market is also faced with pressure from outlooks for ample world supplies this year.

"The sales to China are offsetting the price pressure from the U.S. harvest," Mr. McCambridge said.

On tap for Monday, the USDA is scheduled to release its weekly export inspections report at 11 am EDT and weekly crop progress report at 4 pm EDT.

Write to Andrew Johnson Jr. at



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