U.S. wheat futures are expected to start mixed Friday as lackluster export demand weighs on prices.
In overnight electronic trading, soft red winter wheat for September delivery, the most actively traded contract, rose 3 cents, or 0.5%, to $6.37 1/2 a bushel at the Chicago Board of Trade. Prices for hard wheat traded at the Kansas City Board of Trade and MGEX in Minneapolis were mixed.
Concerns about export demand are weighing on the markets as the U.S. Department of Agriculture reported export sales of 424,200 tons in the week ended June 30, down 22% from the previous week. The sales were toward the low end of traders' expectations, which ranged from 400,000 tons to 700,000 tons.
Exporters, in particular, are worried about the potential that they will lose business to the Black Sea region. Russia, a major grain producer, resumed exports this month after imposing a ban nearly a year ago due to a devastating drought. Egypt, often the world's top wheat buyer, on Thursday bought wheat from Russia and none from the U.S.
"Russian wheat remains the cheapest on world markets for those interested in bargains," said Bryce Knorr, analyst for Farm Futures.
Market participants will keep an eye on export demand, as Tunisia's state grains buyer has issued a tender to buy 100,000 metric tons of soft wheat, according to traders. Many Middle Eastern and North African countries have come into the market in order to take advantage of a slump in international wheat prices and the arrival of cheap Black Sea supplies.
In other news, grain futures could feel pressure from falling crude oil prices, traders said. Oil is linked to the grain markets because corn is made from ethanol.