Argentina enhanced its reputation at a cut-price source of wheat by increasing its discount to Black Sea supplies, which have set the pace in world exports so far in 2011-12.

Black Sea exporters maintained their stranglehold on wheat imports by Egypt, the top buyer of the grain, at the latest tender by Cairo's General Authority for Supply Commodities (Gasc).

Gasc bought 120,000 tonnes of Ukrainian wheat at $250.00 a tonne, and a total of 120,000 tonnes of Russian grain at $251.16 a tonne and $251.50 a tonne – prices in line with those on last order, on November 1.

However, both origins were trumped by Argentine wheat, which Bunge offered at $239.00 a tonne.

This was $4 a tonne cheaper than last week, but was still rendered uncompetitive by higher shipping costs from South America.

Rivalry with Australia? 

The cheapness of Argentine wheat puzzled many traders, with the country possessing a keen importer on its doorstep, Brazil, and having a small harvest to shift this year, at 13.0m tonnes on US Department of Agriculture estimates, down from 15.5m tonnes in 2010-11.

"It maybe they are keen to get shot of stuff before new crop supplies from Australia, the other big southern hemisphere exporter, come onstream in earnest," a UK grain trader told Agrimoney.com.

At FCStone's Dublin office, Jaime Nolan Miralles said he had heard talk that Argentine merchants might "hold back until the issue of more export licences".

The government of President Cristina Fernandez maintains tight controls over shipments, and expected to be on the verge of issuing a further 425,000 tonnes in permits.

"But it seems they are quite willing to complete," Mr Nolan said, adding that lower shipping costs, down by more than $2 a tonne from Argentina to Egypt since late October, may also have played a role in encouraging the country to compete.

Aussie, French, US

The cheapest French wheat was offered at $258.90 a tonne excluding freight, down $1 a tonne on last Tuesday's tender result, with Australian wheat offered at $269.90 a tonne. 

Once again, no US wheat was offered, contributing to fears for the competitiveness of US supplies, stoked by poor weekly export data, and sending the grain down 3% in Chicago.