Wheat steadies after slide as Egypt tender watched

PARIS/SINGAPORE: Chicago wheat edged higher on Wednesday as news of an import tender by Egypt encouraged the market to steady after a day-earlier slide fuelled by Russia playing down the possibility of export restrictions.

Corn inched down after earlier touching a two-week high as investors assessed the impact on crops of torrential rain in parts of the US Midwest and the consequences of an export levy by rival supplier Argentina.

Soybeans were almost unchanged.

The most-active wheat contract on the Chicago Board of Trade was up 0.9 percent at $5.36 a bushel by 1110 GMT. It closed down 2.6 percent on Tuesday but held above one-month lows struck last week.

Russia's agriculture ministry does not see a need to impose an export duty or curb grain exports in any other way, it said in a statement after a meeting with exporters on Monday.

After a US holiday closure on Monday, Chicago futures on Tuesday reacted strongly to the comments, which dampened recent speculation that tightening supply in Russia could lead the government to limit shipments.

But weather-reduced harvest yields in Russia and other major producing zones such as the European Union are still set to reduce global availabilities, putting a floor under prices, analysts said.

"We don't see a big downside in prices as the Russian crop is much smaller," said Phin Ziebell, an agribusiness economist with National Australia Bank.

"The trend in wheat prices is upside. We are seeing yield declines in several exporting countries."

Egypt, one of the world's biggest wheat importers, announced an international tender following Tuesday's price slide, shifting attention back to export demand.

The tender, which is being held for an unspecified amount on Wednesday, will be watched for signs of availability and prices for Russian wheat.

CBOT corn was down 0.1 percent at $3.67-3/4 a bushel, after climbing to its highest since Aug. 22 at $3.69-3/4. Soybeans ticked down a quarter of a cent to $8.44 a bushel.

Corn has been supported by heavy rain linked to Tropical Storm Gordon, although some analysts say crops remain on course for bumper yields in the upcoming harvest.

The US Department of Agriculture in a weekly report late on Monday estimated that 67 percent of corn was in good or excellent condition, slightly below average analyst expectations calling for an unchanged 68 percent score.

The good/excellent rating for soybeans was unchanged from the previous week at 66 percent, in line with expectations.

"With US crops which are virtually complete, bulls are looking to demand for the next reason to buy," US brokerage Allendale said in a note.

Traders were assessing whether Argentina's announcement this week of a special export levy on grains will curb flows of wheat, corn and soy products from the major exporter, and bolster demand for US supplies.