The big southern hemisphere wheat exporters showed their competitiveness in even far flung markets by winning their first showing at an Egyptian grain tender this season, underbidding US supplies.

France, Egypt's biggest wheat supplier since drought-struck Russia banned grain exports in August, maintained some trade, accounted for 60,000 tonnes of the 230,000-tonne order.

However, the bulk went to the big-two southern hemisphere shippers, Argentina - which Egypt's state grain buyer, the General Authority for Supply Commodities only added to its list of usual suppliers after the Russian ban – and Australia.

Both countries undercut US grain, of which the cheapest offered was $303 a tonne. American wheat had won trade after the previous five tenders from Egypt, the world's top importer of the grain.

' A surprise' 

"It was a surprise that they didn't go for US wheat at all," a City analyst told Agrimoney.com.

The switch to Argentina and Australia was in part a reflection of the timing of the shipment, in early January, when both countries will have significantly finished their harvests, and should have plenty of crop to sell.

"Even so, it is surprising they have shown up so soon," the analyst said.

"It will be interesting to see if the US comes back. A lot of consumers have not got coverage for the first half of next year, and we are going to have to wait to see where that trade goes to."

European exports 

Ironically, Australia's reappearance on the roster came as the country's dollar rose above parity with the US dollar, reducing the competitiveness of Australian exports.

The rise to parity for the first time since the Aussie was floated in 1983 followed a surprise decision by the Australian central bank to lift interest rates by 0.25 percentage points to 4.75% to curb inflationary pressures.

Meanwhile, Europe is running short of available export capacity, and will "essentially exhaust tradeable supplies later this quarter", JP Morgan analysts believe.

David Sheppard, managing director of UK grain merchant Gleadall, said that "early 2011" looked a more realistic deadline for EU shipments to run low.

Today's result took the total amount of French wheat bought in 2010-11 through tender above 1.6m tonnes, out of a total of 3.0m tonnes purchased.