Investors may be reading too much into Russia's slow start to 2013-14 for wheat exports on the benchmark route to Egypt, Sovecon saying that it reflects a squeeze on Cairo's finances rather than on grain supplies.
Egypt's state grain buyer, Gasc, has bought more than 1m tonnes of wheat since the start of 2013-14 in July, after a hiatus in purchases since February as the cash-strapped country ran down inventories.
However, unlike last season, when Russia won the lion's share of early orders, Gasc has this year awarded most of its business to suppliers of wheat from Romania and Ukraine.
This has stoked ideas that a harvest of variable quality and yields - as highlighted by Black Earth Farming on Friday – combined with tight supplies left over from last year's drought-affected harvest, are keeping Russia on the back foot on export markets.
"Ukraine is also a offer that the Russian can't seem to contend with as long they have a focus on replenishing reserve stocks," one US broker said, estimating Ukrainian wheat has having a $5-a-tonne discount to Russian supplies.
Price vs quality
However, Andrey Sizov Jr, managing director at Moscow-based SovEcon, said that a price gap was typical, given that Russian wheat is typically regarded as of higher quality than Ukrainian supplies.
The switch by Gasc to preferring Ukrainian supplies may be down to the authority switching its emphasis towards price, and lowering its quality hurdle.
"It looks like what has happened to Egypt's foreign exchange resources is making them emphasise price more over quality," he told Agrimoney.com.
Indeed, "for a long time, Gasc would not buy Ukrainian wheat at all because of the quality concerns", he said, a reference to the authority's ban on Ukrainian supplies from 2008-2011.
Shallow vs deep sea ports
Russia's wheat exports in fact looked set to prove strong in August, hitting 2.5m tonnes, up from 2.3m tonnes last, reflecting increasing trade with Turkey.
Indeed, Turkey, the top destination for Russian wheat exports last month – at 457,000 tonnes, ahead of 220,000 tonnes to Egypt - may challenge the North African country as the top destination for Russian shipments.
"Turkey is getting more and more important for Russia. Egypt used to be a much bigger destination," Mr Sizov said, while cautioning that early-season results may be being skewed by a logistical quirk, with Russia's shallow sea ports, and smaller shipments, tending to dominate early deals.
"Small cargoes are easier to fill at this stage of the season than getting together 50,000 tonnes for a Panamax," he said
"Turkey tends to buy more wheat in small shipments than Gasc," which enforces a penalty on merchants offering wheat in smaller loads.