Wheat prices extend gains after Egypt, the world's top importer, unveiled its biggest order since at least 2010, taking to 1.25m tonnes its purchases in less a month.
Wheat prices, after falling in Chicago in nine of the previous 10 sessions, closed up 2.7% on Thursday after Egypt's state grain buyer, Gasc, unveiled an order of 475,000 tonnes.
Even by Egyptian standards, the order was unusually large, beating a 420,000-tonne purchase a year ago, and represented was the latest of a series of deals by importers during the break in prices, with Jordan, Saudi Arabia and Tunisia also buying.
Minutes after Gasc unveiled its order, Iraq was revealed to have unveiled a tender.
The extent of the rally in US prices puzzled some investors, given that Gasc bought solely from Black Sea suppliers, mainly Russia.
"I am surprised that we have had such a large move in Chicago, given that this order has gone specifically to non-US origins," an analyst at a leading London bank told Agrimoney.com.
Result of Gasc tender, for October 21-31 delivery
Russian origin: 60,000 tonnes, at $327.45 per tonne plus freight of $11.48 per tonne from Olam
60,000 tonnes, at $328.85 per tonne plus freight of $11.94 per tonne from Glencore
60,000 tonnes, at $328.85 per tonne plus freight of $11.97 per tonne from Toepfer
60,000 tonnes, at $330.64 per tonne plus freight of $11.97 per tonne from Soyuz
Romanian origin: 60,000 tonnes, at $333 per tonne plus freight of $11.30 per tonne from Toepfer
However, besides the size of the order – which comes a at a time when the UN has cautioned over the dangers of government stockpiling in fuelling grain shortages – other investors took heart at the rising price that Egypt paid, in contrast with the declines in Chicago futures.
The average cost, of a little under $331 a tonne, represented a rise of nearly $8 a tonne, or some 2.4%, since Gasc's last order, last weekend.
Over the same period, Chicago futures had, as of Wednesday's close, fallen by 2.4%.
Indeed, while US wheat was not offered this time, some French supplies, which have also been well out of competitiveness in Egypt tenders so far in 2012-13, came within $5 a tonne of a winning bid, excluding shipping costs.
A UK grain trader said: "Black Sea wheat is getting closer to being priced out of export markets, as exportable supplies run low. That is making other origin look more attractive."
... plus, for November 1-10 deliveryRussian origin: 60,000 tonnes, at $332.89 per tonne plus freight of $11.97 per tonne from Glencore
Romanian origin: 60,000 tonnes, at $336.33 per tonne plus freight of $11.25 per tonne from Bunge
Ukrainian origin: 55,000 tonnes, at $329.51 per tonne plus freight of $13.40 per tonne from Venus
Indeed, there were rumours in the market that some Russian offers had been pulled, for fear of merchants being unable to fulfill them.
"You may start to see the likes of France show up as tender winners soon. The market is basically working as it should do," the traded added.
In Paris itself, benchmark November futures closed up 0.6% at E261.50 a tonne, with a late sell-off taking prices below the intraday high of E263.50 a tonne reached after Gasc unveiled its deal.