Wheat futures held firm in Paris on dire day for
agricultural commodity prices after Egypt made its largest order of French
wheat since at least 2010-11, as prices of Russian supplies soared out of
Egypt's state grain authority, Gasc, purchased 300,000
tonnes of French and Romanian wheat at its latest tender, taking above 2m
tonnes its purchases since the 2012-13 marketing year started in July.
For the first time this season, Russian wheat failed to win
a place on a Gasc order roster, thanks to spiralling prices – which analysis group
Ikar says have reached their highest since the Soviet Union collapsed more than
20 years, lifted by the squeeze put on supplies by a drought-hit harvest.
The only Russian wheat offered, by Glencore, was priced at
$372 a tonne excluding freight, more than $23 a tonne above the average price
that Gasc paid for the winning French and Romanian supplies.
Dvorkovich, Russian deputy prime minister, revealed the country may next week start sales of grain from state inventories.
'Question of when'
Russia's failure was viewed by many investors as predictable,
given the decline in the competitiveness in its offers as its exportable
surplus has run low.
"It has been long-trailed that demand will switch away from
the Black Sea. It was just a question of
when," a UK grain trader told Agrimoney.com.
However, the size of the order, of which French grain comprised
an unusually-large 180,000 tonnes, did surprise some investors, after Gasc last
week said it had almost seven months of supplies in store.
"It could be for political reasons, to make sure there is
enough grain in store at a time when the [Middle East and North Africa] region is
not exactly as its most stable.
"Or it could be that it sees prices recovering once harvest
pressure on corn eases," and the latter stages of the US corn harvest reduce
the opportunity for buyers to purchase straight off the combine.
Paris wheat futures for November delivery closed unchanged at
E261.25 a tonne.
That represented a resilient performance on a
day when Chicago wheat lost 2.0%, with corn and soybeans falling even further to post their lowest prices since early July.
The drop in Chicago prices came despite evidence from the tender that US wheat is improving its competitiveness on the world stage, with soft red winter wheat offered by merchant Venus at $356 a tonne, only some $6 a tonne from winning bids, excluding freight, and now far cheaper than Russian supplies.
London feed wheat ended 1.6% down at £200.80 a tonne.