Wheat drops for second session away from seven-month high

Wheat futures fell nearly two percent in American trade away from late July highs, as the dollar index rebounded from December 17, 2014 lows for the third straight session, amid a lack of data from the US, the world's second largest wheat exporter. 

As of 08:39 GMT, wheat futures due on May 15 fell 1.91% to $4.6250 from the opening of $4.7150, while the dollar index rose 0.68% to 89.71 from the opening of 89.10. 

Investors await the Federal Reserve's minutes of the January 30-31 meeting, at which policymakers votes to hold interest rates unchanged between 1.25% and 1.5%. 

The US Department of Agriculture released its monthly report on wheat inventories for the marketing year ending next May 31, forecasting 1,009 million bushels, up from 989 million in January forecasts, as exports projections fell to 950 million from 975 million. 

As well, the USDA reported total wheat sales in the week ending February 8 at 311.1 thousand tonnes, down 21% from the previous week, and down 2% from the four-week average, as analysts expected between 200 and 400 thousand, with Japan at the top of the buyers list with 84.4 thousand tonnes, followed by Indonesia at 83.3 thousand. 

Then Taiwan at 78.5 thousand, then Mexico, China and Guatemala at 58.7 thousand, 33.0 thousand, and 31.5 thousand tonnes respectively, while unknown buyers accounted for 130.5 thousand tonnes. 

Otherwise, Egypt, the world's largest wheat importer, announced a March deadline to set up local prices a month before harvest, with the Egyptian agriculture ministry stating that wheat used in the bread subsidy program reached 9 million tonnes a year. 

The Egyptian ministry didn't specify whether it will link local prices with global ones, or will get back to the old system, where it subsidized farmers with a price higher than global ones, noting that Egypt bought about 3.6 million tonnes of local wheat last year.