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Egypt buys small on wheat as offers dry up

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Egypt's Gasc bought just 55,000 tonnes of wheat at its latest tender, its smallest purchase of the season, after just three merchants offered grain – and one of those used the wrong documentation.

Gasc, the grain authority for the world's top wheat importing country purchased 55,000 tonnes of Ukrainian wheat, from merchant Venus, at $289 a tonne, plus $13.49 a tonne in freight.

The deal underlined Gasc's willingness to keep buying from Ukraine despite the country's economic and political turmoil.

Indeed, it took the authority's total purchases from Ukraine above 1.0m tonnes for 2013-14.

Dearth of offers

But Gasc failed to enjoy a financial reward for its loyalty, paying $3.13 a tonne, or 1.1%, more for its Ukraine wheat this time than it did at its last tender, two weeks ago, when it also purchased from Venus.

Offers at Gasc tender, May 16, by merchant and country

Venus: Ukraine, 55,000 tonnes, $289 a tonne

Glencore: French, 60,000 tonnes, $291 a tonne

Bunge: French, 60,000 tonnes, $290.87 a tonne; US, 55,000 tonnes, $282.87 a tonne

However, the authority had little choice over today's purchase, being offered just 230,000 tonnes of wheat, less than one-third of the volumes it could typically expect, and with half of that, from Bunge, disqualified because of incorrect paperwork.

There were, unusually, no offers of Russian wheat, although the tender results came as SovEcon cautioned over the thinness of the country's remaining supplies, saying that unexpectedly strong exports meant that "a significant portion of the remaining stocks of old wheat crop have been taken away from the domestic market".

The Moscow-based consultancy raised to 18.4m tonnes from 17.8m tonnes, its forecast for Russian wheat exports in 2013-14.

But SovEcon cautioned that stocks were so low that exports in July, the first month 2014-15, might fall below the 2.0m tonnes a year before because of the low level of carryover supplies.

'A bit picky'

The low level of offers to Gasc reflected the dearth of inventories in Russia and some other countries too.

Offers at Gasc tender, May 2, by merchant and country

Venus: Ukraine, 55,000 tonnes, $285.87 a tonne

Glencore: Russian, 55,000 tonnes, $292.40 a tonne

Bunge: French, 60,000 tonnes, $304.24 a tonne; US, 60,000 tonnes, $301.74 a tonne

Cargill: French, 60,000 tonnes, $300.45 a tonne; Russian, 60,000 tonnes, $299.50 a tonne

However, Egyptian buyers have also irritated merchants by delaying the issuance of letter of credit for purchases.

"If you are a trader with only so much wheat left this side of the next harvest, you might be a bit picky who you sell too," the trader said.

By Agrimoney.com

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