Wheat prices found – temporary – relief from selling after
results of an Egyptian tender highlighted the competitiveness of US supplies,
and eased concerns over logistics raised by a no-show at the previous event.
Chicago wheat for March recouped early losses to bounce back
into positive territory, reaching $6.24 ¼ a bushel, after the results of the
tender by Egypt's Gasc grain authority.
However, the support proved short-lived, with the contract
closing down 0.3% at from a contract low of $6.19 ¾ a bushel on Tuesday, the
lot's lowest ever finish, and losing another 0.6% in early deals on Wednesday
to set a fresh contract low of $6.16 ¼ a bushel.
Although the tender was won by Black Sea exporters, with
Gasc buying 60,000 tonnes from both Romania and Russia, American soft red wheat
was by a distance the cheapest on offer, but ruled out by the higher costs of
shipping across the Atlantic.
Bunge offered US wheat at $294.87 a tonne, below the winning
bids priced at $301.97 a tonne for Romanian wheat and $302.70 a tonne for
'Lost a bit of
A UK trader said that the result "may help Chicago wheat
prices find a floor," after falling some 7% in so far this month, in part on
concerns about a slowdown in US exports.
"US prices have been seen as having lost a bit of
competitiveness. But they may now have reached a level people are happier
with," the trader told Agrimoney.com.
Furthermore, the offer eased concerns over logistical bottlenecks
in the US, which have also been seen hampering the wheat export performance,
with the crop competing for capacity with rebuild supplies of soybeans and,
"The trade has made mention of capacity constraints at port
due to soybean and corn bookings, which is an issue that has been developing
through the fall," Brian Henry at Benson Quinn Commodities said.
"Port capacity issues are limiting the aggressiveness of the
US wheat exporter."
'Ports appear to be
Indeed, logistical problems were blamed for a US no-show at
the last Gasc tender, last week.
"Although it now looks competitively priced, no US wheat was
offered, almost certainly because they could not be sure of being able to load
it in time," traders at a European commodities house said.
"US Gulf ports appear to be struggling."
Traders said that "a similar problem is found in Canada", a
country which the US Department of Agriculture said last week could thanks to a
lower-quality harvest take a higher profile in wheat tenders by Egypt, the
biggest importer of the grain.