A pick-up in wheat buying by major importers gathered steam
as Egypt, the top importing country, and Saudi Arabia bought nearly 1m tonnes
between them in two days.
Saudi Arabia's GSFMO grain authority on Monday revealed that
it had bought 780,000 tonnes of soft and, mainly, hard wheat, for shipment
between September 10 and the end of November.
This represents an unusually large order even for GSFMO,
which two weeks ago estimated it would import 2.7m tonnes of wheat this year,
up 100,000 tonnes on 2013.
Saudi Arabia's import needs are rising thanks to a policy of
phasing out support for domestic production, which uses large amounts of valuable
ground water reserves.
Monday's order was priced at $289.89 a tonne and $291.25 a
tonne for two soft wheat cargoes, on a cost and freight basis.
The 11 hard red winter wheat cargos were purchased for
$288.48-309.90 a tonne on a cost and freight basis.
GSFMO offered no details about the countries from which the
grain was being sourced, although acceptable origins were specified as
Australia, the European Union and North and South America.
The order comes two days after Egypt's Gasc grain authority
purchased 180,000 tonnes of Romanian and Russian wheat at tender, taking its
total this year to some 5.4m tonnes, at a cost of more than $1.5bn.
Romania again scooped the majority of the order, at 120,000
tonnes, with orders priced at $252.50 a tonne and $252.28 a tonne, excluding
shipping, but exploiting its low freight cost to Egypt too.
Romania, while a relatively small wheat producing country, counts
above its weight in Egyptian tenders thanks to the competitiveness of its
grain, and has been indeed the top origin in 2013-14, with some 1.9m tonnes.
However, the cheapest order was actually a Russian one, at
$251.74 a tonne, which accounted for the other 60,000 tonnes of the order.
French, US offers
French wheat came a little closer to competitiveness, with
the cheapest order prices at $257.69 a tonne, some $5 a tonne out of the
running, but more than $2 a tonne cheaper than the last tender, two weeks ago.
However, shipping charges from France are significantly more
expensive than from the Black Sea, and French supplies, which typically come in
with relatively high moisture rates, may also suffer penalties on this score.
US soft wheat was offered at $264 a tonne, compared with
$255.74 at the previous tender.
Wheat prices on the Chicago futures exchange have changed
little during the intervening period.
Other wheat purchases in the last week include 96,180 tonnes
of US grain purchased by Taiwan, 90,000 tonnes of Black Sea supplies bought by
Pakistan, and 120,000 tonnes bought by the United Arab Emirates, also from the