February 22, 2005

Europe cash wheat steady; Egypt sale fails to lift price

French cash wheat prices are steady Monday, with a sale of French wheat to Egypt over the weekend not lifting values due to the low price paid.

Egypt's General Authority for Supply Commodities, or GASC, said Saturday it had bought 60,000 metric tons of French wheat on a free-on-board basis at US$128.95/ton from Itraco.

The bid was said to be ¡°very aggressive", at the current export refund of EUR6/ton granted by the E.U. at its most recent tender for subsidized wheat export licenses.

However, another broker said because the wheat is only for March 20-31 shipment, there's a strong likelihood that wheat export refunds will be increased before the cargo needs to be shipped.

Current level of refunds are not enough to generate new export businesses, given the large quantities of wheat going into intervention stores. The EU will be keen to see more exports.

French standard wheat, FOB Rouen, is quoted at EUR111/ton for February/March, little changed from Friday.