U.S. wheat futures were mixed at midday Tuesday, coming off their early highs on ideas that U.S. wheat was overpriced, traders said.
Market sentiment turned bearish after Egypt's main government wheat buyer, the General Authority for Supply Commodities, rejected U.S. wheat in a snap tender, buying 85,000 tonnes of Russian wheat instead.
"It looks like the trade is slightly disappointed with that," said Jeff Kravitz, a market analyst with Iowa Grain in Chicago. "A little bit of profit-taking is going on, but we haven't seen any heavy selling."
Wheat was underpinned by expectations that export demand will remain strong due to tight global supplies. That optimism helped lift Chicago Board of Trade wheat futures overnight, buoying March wheat to a contract high at $7.52-1/2 per bushel.
"There are inquiries under the market. The world still needs wheat at this time," a CBOT floor trader said.
Still, without the leadership of a strong bull market in wheat, CBOT corn and soybean futures turned down, in step with a broader setback in commodity and equity markets.
"Corn entering the session really didn't have much fundamental support," said Shawn McCambridge, analyst with Prudential Financial. "With the other markets sagging back it's putting pressure on corn as well."
Crude oil prices on the New York Mercantile Exchange were choppy, dipping near $71 per barrel on fears of a slowing world economy. U.S. gold futures were down, and the Dow Jones Industrial Average fell roughly 150 points, or 1.1 percent, after Merrill Lynch cut its rating on three investment banks.
At the CBOT, December wheat was unchanged at $7.38 per bushel as of 12:15 p.m. CDT (1715 GMT).
December corn was down 5 cents at $3.48 per bushel and November soybeans were down 1/4 cent at $8.72-1/2 a bushel.
Wheat futures were higher in Europe, reaching contract highs on heavy export demand. Paris-based Euronext wheat futures were up 1.75 to 4.50 euros, with benchmark November up 3.50 euros or 1.5 percent at 241 euros, after reaching a contract high of 244.75 euros.
That was the highest price paid for a tonne of wheat on the second position of Euronext milling wheat futures since their launch in 1998.
Since the start of the year, the November contract has gained 120 percent.
The next technical objective on the French futures was at 250 euros a tonne, traders said.
"The United States and Russia are well ahead of their sales targets, so there is a major drop in exportable surpluses at a time when demand remains strong," a European trader said.
Iraq Saturday issued a new a tender to buy at least 50,000 tonnes of hard wheat, while Bangladesh issued another tender to import 50,000 tonnes of wheat by December and India is in the market for unspecified volumes.