GM wheat find threatens exports, stokes consumer fears
"Asian consumers are jittery about genetically modified food," said Abah Ofon, an analyst at Standard Chartered Bank in Singapore. "This is adding to concerns that already exist on quality and availability of food wheat globally."
European traders said Black Sea and EU wheat was well positioned to benefit in any displaced demand for U.S. grain. But some were more pragmatic on the overall impact.
"The market is going to need U.S. wheat, we won't be able to do without it, so that could mean more checks and more sanitary certificates," one European dealer said.
"Japan is in a position to be selective and to react sharply. It has other suppliers and the financial means to be choosy and pay more if needed. This is not necessarily the case for (top global wheat importer) Egypt which is in a difficult financial situation."
A major flour miller in China, which has been stocking U.S. wheat in recent months, said importers will tread carefully.
China has emerged as a key buyer of U.S. wheat this year, taking around 1.5 million tonnes in the past two months. Chinese purchases in the year to June 2014 are estimated to rise 21 percent to 3.5 million tonnes, according to the USDA, with most shipments coming from the United States, Australia and Canada.
The Philippines, which buys about 4 million tonnes of wheat a year and relies mainly on U.S. supplies, is waiting for more details before acting, an industry official in Manila said.
"I won't be surprised if other countries start cancelling or reducing their purchases of U.S. wheat, particularly Asian countries, putting pressure on wheat demand," said Joyce Liu, an investment analyst at Phillip Futures in Singapore.
Genetically modified crops cannot be grown legally in the United States unless the government approves them after a review to ensure they pose no threat to the environment or to people.
Monsanto in a statement posted on its website said: "While USDA's results are unexpected, there is considerable reason to believe that the presence of the Roundup Ready trait in wheat, if determined to be valid, is very limited."