July 19, 2013

Egypt makes biggest wheat order in 2013 at 300,000 tonnes

Following a four-month hiatus, Egypt's state grain authority, at its second tender this month, bought 300,000 tonnes of wheat, its biggest order since December.

As with the previous tender, all of the business went to Black Sea exporters, with Russia joining Romania and Ukraine, the winners last time.

It was Russia's first victory at an Egyptian tender since October, underlining the country's return to exports now that its on-going harvest is replenishing stocks depleted by a strong start to exports in 2012-13 after a drought-hit crop.

Separately, SovEcon, the Moscow-based analysis group, raised to 700,000-800,000 tonnes, from 500,000-600,000 tonnes, its forecast for Russia's exports this month, citing business with Egypt, Iran, Iraq and Israel.

Underlining the competitiveness of the wheat export market, General Authority for Supply Commodities (GASC) paid, at an average of US$247.93/tonne, US$3.30/tonne less for grain this time than two weeks ago. Chicago futures, the world benchmark, show a small rise during that time.

French wheat, the only non-Black Sea supplies submitted to the tender, was offered at US$259.72, by Cargill. While some US$12/tonne above the highest winning bid, excluding freight, this is closer than at GASC's July 2 tender, when French wheat was US$16/tonne behind the pace.

Separately on Thursday (Jul 11), Strategie Grains lifted its estimate for the EU wheat harvest by 2.1 million tonnes, including a small upgrade for the French crop.

No US wheat was offered to the latest tender, although it is considered unlikely to have won a showing in the tender being more expensive than Black Sea grain, especially when the extra cost of shipping across the Atlantic is factored in. However, separately, the USDA revealed US weekly export sales of 996,600 tonnes of wheat, above market expectations of a figure of 400,000-800,000 tonnes.

The figure included 442,000 tonnes bought by China, which has made a series of purchases following a disappointing domestic harvest, which saw quality depleted by late rains.