Wheat futures find fleeting relief in Egypt tender

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 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 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 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 Russian.

'Lost a bit of competitiveness'

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

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, especially, corn.

"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 struggling'

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.

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