A tender by Egypt offered what some investors said was the first tangible evidence of
Russian wheat export supplies running dry as offers of the grain from the
former Soviet Union slowed to a trickle.
Russian wheat maintained its place among winners at tenders
by Gasc, Egypt's state grain buyer, which purchased a further 235,000 tonnes of
the grain, taking its total orders over the past month nearly to 1.5m tonnes.
However, Gasc purchased the only 60,000 of Russian wheat on
offer. At the last tender, last week, 420,000 tonnes of Russian wheat was put
up for sale.
The drop in volumes was seen as reflecting a drying up in Russia's
exports as the country, while renowned for competitively priced supplies, runs
out of wheat to sell following a drought hit harvest.
"It looks like the point the other exporters have been
waiting for has been reached," a UK grain trader told Agrimoney.com.
"Russia looks to be running out, which will allow France and
the US hin on Gasc's business."
Traders at a major European commodities house, with significant Black Sea interests, said: "Russia could be starting to have more limited supplies to
The delivery period for the Gasc tender, of November 11-20, concurs with the period many commentators have suggested for Russia running out of wheat for shipment.
However, the traders offered alternative explanations too, including that "this tender happened too soon after the last tender
preventing exporters from participating having only recently made sales", and so potentially facilitating Gasc's ability to diversify suppliers without undermining its reputation for taking the most competitive prices.
Egypt attempting to introduce competition and increase their supply base, to
limit the risk of a key supplier not producing on sales," the traders asked, recalling the Russian export embargo in 2010 which prevented delivery of some Gasc orders.
Gasc in fact bought 120,000 tonnes of French wheat on
Tuesday, its first order from the European Union's top producer of the grain
At $347.25 a tonne, the winning lots were less than $4 a
tonne more expensive than the Russian offer, excluding freight.
A month ago, French wheat was some $20 a tonne more
expensive, but the gap has closed as tightening supplies have pushed up Russian
And some French wheat was on offer, from Cargill, was only
$1 a tonne more expensive than the Russian lot, but failed to meet Gasc strictures
on only loading at a single port.
'Still not closing
US wheat was offered by Venus, the Egyptian merchant, at
$355.00 a tonne excluding freight, not cheap enough to win business but closing
its discount over Russian supplies to less than $12 a tonne from some $40 a
tonne a month ago.
Indeed, the dynamics of the auction raised hopes that US
wheat was poised to win its first Gasc business of 2012-13.
"Egypt is still able to purchase non-US wheat but world
values are grinding higher. It's still not closing time at the local watering
hole," FCStone's Mike O'Dea said.
However, an initial run up in Chicago wheat prices to a day
high of $8.98 ¼ a bushel immediately after the tender was announced ran out of steam
amid jitters ahead of a key US Department of Agriculture crop report on Wednesday.
The contract stood at $8.87 a bushel at 11:45 Chicago time
(17:45 UK time), down 0.3% on the day.
Paris wheat for November closed 0.7% lower at E253.50 a
tonne, with its London peer ending down 1.0% at £204.50 a tonne.