Chicago Board of Trade wheat futures fell on Thursday on concerns about the fate of U.S. wheat exports following the discovery of an unapproved genetically modified (GM) wheat variety in the U.S. Pacific Northwest (PNW).
Japan, the top importer of U.S. wheat, canceled a tender to buy western white wheat after the U.S. government announced on Wednesday that it had found GM wheat sprouting on an Oregon farm.
“At this point, the key feature might be whether this is an isolated incident that is confined to the PNW. The concern is going to be whether the genetics might have inadvertently entered the ‘seed’ pipeline since 2005 when test plots of this wheat were produced,” said Dale Durcholz, an analyst for Illinois-based advisory service AgriVisor.
Asian countries led by Japan are major buyers of U.S. white wheat, a variety used for food, and sensitivities there over GMO crops for human consumption may slow buying.
“We are likely to be the ‘seller of last resort’ when it comes to Japanese purchases in the second half of the calendar year unless new-crop supplies have been hit harder by weather than currently assumed by the trade,” said Mike Zuzolo, an analyst for Global Commodity Analytics.
Traders said it was too early to say if the case would have significant consequences for exports, but in a sign of effects beyond Asia, the European Union said it would test incoming U.S. white wheat shipments for GMO content.
CBOT wheat for July delivery closed four cents per bushel lower at $6.98-3/4 per bushel (all figures US$).
“The cancellation by Japan of white wheat orders hurt wheat, and now we have to figure out how much GMO wheat may be out there,” said analyst Joe Hofmeyer of CHS Hedging in Minneapolis. “We have other customers such as the EU and China that want to know.”
Corn and soybean futures also fell on Thursday on spillover selling pressure from the decline in wheat and on profit-taking following recent rallies for each due to excessive wet weather in the U.S. that was slowing spring plantings.
“We already had risk premium put into each market because of the wet weather that is delaying plantings, and they’re just taking a breather now,” Hofmeyer said.
Corn futures also were weighed down by weaker cash markets, technical selling and slow export sales of old-crop U.S. corn.
CBOT corn for July delivery fell 10-3/4 cents per bushel to $6.54-1/4, and soybeans for July were down six at $14.95-3/4.
— Sam Nelson covers ag commodity markets for Reuters in Chicago. Additional reporting for Reuters by Valerie Parent and Gus Trompiz in Paris and Colin Packham in Sydney.