The selling pressure which sank wheat prices in the last session returned on Monday to drag them into negative territory too, despite an early boost from victory in an Egyptian grain tender.

Egypt's Gasc grain authority, after its first wheat tender in more than a month, bought 400,000 tonnes of the grain, of which 280,000 tonnes were purchased from the US.

The order revived hopes for US wheat imports fulfilling expectations that a sluggish start to 2012-13 would give way to a stronger finish as supplies in the Black Sea, the leader in international markets for the first few months, run dry following drought-diminished harvests.

Ideas for demand turning America's way had received a knock on Thursday, when weekly export sales data came in well below investor expectations, a result which contributed to a fall of 3% in Chicago prices on Friday.

'Strong sign'

At Phillip Futures in Singapore, Lynette Tan said that "the outlook for wheat futures today seems particularly strong" following the purchase by Egypt, the top importer of the grain.

The order was "a strong sign of the pick-up in US exports that market participants have been anticipating for more than a month".

Indeed, the decline in Russia's exportable supplies was highlighted on Monday by forecasts from Ikar, the consultancy, that the country's shipments would halve to 700,000-800,000 tonnes this month, from 1.55m-1.60m tonnes last month.

No Russian, or Ukrainian, wheat was offered to the Egyptian tender.

"As the Black Sea region is running low on stocks, the biggest competitors for US wheat now are Argentina, Romanian and French wheat," Ms Tan added.

'New competitiveness'

The balance of Gasc's order comprised 60,000 tonnes of Romanian wheat and 60,000 tonnes of French grain, with Argentine wheat offered some $10 a tonne more cheaply, but disadvantaged by higher shipping costs.

The tender result "highlights the new competitiveness of the US market," Paris-based consultancy Agritel said.

"US wheat is now traded at parity with European wheat."

'May support values'

At Commonwealth Bank of Australia, Luke Mathews termed the order "encouraging for prices" in Chicago, saying that the "export sale may support values today".

"Expectations that the US will soon start to win export business," besides the weak start to the US winter wheat crop, "remain supportive for values".

The data come days after Macquarie forecast a sharp uptick to US wheat exports, predicting they will achieve a record finish to 2012-13.

However, Chicago wheat for March, which had earlier gained 1.6%, retreated to close at $8.60 ¾ a bushel, a drop of 0.3%.

The decline was blamed on improved prospects for US winter wheat, with rain forecast for drought-hit hard red winter wheat areas.

There are some thoughts that some moisture may be headed to the Plains in the first half of next week," said Darrell Holaday at broker Country Futures, if being sceptical of the forecasts.

"We really do not see any significant rainfall forecast for the Plains showing up in the Plains. We do see higher prospects for the Midwest, but are not optimistic about the hard red winter wheat areas."