Russian wheat scooped a clean sweep as Egypt's Gasc grain
authority extended a buying spree, but US supplies proved their price
credentials with the cheapest offer, excluding freight.
Gasc, the official grain buyer for the top wheat importing
country, on Wednesday bought 175,000 tonnes of Russian wheat at prices of
$246.99-249.00 a tonne excluding freight.
The orders took to 890,000 tonnes, at a cost of more than
$230m, Gasc's purchases this month, the start of the 2014-15 wheat marketing
season for most northern hemisphere countries, but also the start of Egypt's
Of this, 355,000 tonnes has come from Russia, harvest
forecasts for which have suffered a series of upgrades, the latest on Monday by
consultancy Ikar, which raised its forecast for the wheat harvest by 1.2m tonnes
to 57.5m tonnes.
Ideas of a rash of Russian offers have also been spurred by sanctions by the European Union and the US against the country, over its role in the Ukraine crisis, potentially making it tougher for some lenders to finance deals.
"However, this could also encourage traders to liquidate their positions in Russian wheat and sell that wheat before the sanctions take effect," US broker CHS Hedging said.
Cheap US cargo
Nonetheless, the Russian offers were not as cheap as some prices
being talked about in the market on Tuesday as available from that origin, of
below $240 a tonne excluding freight.
Indeed, a cargo of US soft red wheat was the cheapest tendered
to Gasc, by Louis Dreyfus at $243.44 a tonne, but ruled out by the high cost of
shipping across the Atlantic, of some $25 a tonne.
The offer, in lifting hopes for US exports, supported
firmness in Chicago soft red winter wheat futures, which for September delivery
were 0.9% higher at $5.24 ½ a bushel in late deals.
Separately on Thursday, the US Department of Agriculture
unveiled the sale of 175,500 tonnes of US wheat to Nigeria for 2014-15, plus a
further 30,000 tonnes for next season.
This followed a sale to Nigerian buyers of 101,000 tonnes of
US wheat announced on Monday.
"It was encouraging to see the US winning that Nigerian business," Chris Narayanan at Societe Generale told Agrimoney.com, adding that he viewed American wheat export prices as being "in the middle of" the range of offers, including freight, as measured at the major North African import market.
The USDA will tomorrow unveil export sales data for last
week, excluding the data above, which Citigroup foresees showing a rise to 475,000-575,000
tonnes in volumes, up from the 443,200 tonnes the week before.
The Gasc tender was also notable for the absence of
competitive offers from Romania, the authority's top origin for wheat imports
in 2013-14 and, so far, this season too.
Indeed, only two cargos from Romania were offered this time,
down from three at the last tender, a week ago, and six at the event before that, on July 9.
The cheapest offer of Romania wheat was at $253.88 a tonne
However, Romania's wheat harvest has been dogged by the
rains which have affected much of the European Union, encouraging sprouting of
ripe grain and quality downgrades particularly evident in France, the bloc's
top producing country.
'More rain than
World Weather said that on Tuesday that "rain was reported
from eastern France to Czech Republic causing more concern over the ongoing wet
bias in central Europe.
"Europe weather will still generate a little more rain than
desired for small grain and winter rapeseed harvest conditions," although there
will be a "break in the precipitation today into Friday from eastern France to
Czech Republic before more rain falls during the weekend.
"The environment should be improved over that of the past
two weeks, but there may still be more rain than desired to get this year's
crops out of the fields without any further quality declines."