France showed it retained firepower in wheat export markets, despite merchant "panic" instilled by rain damage to quality, even as it lost out on the latest tender by Egypt, the world's top importer of the grain.
Egypt's Gasc grain authority, at its fifth tender of 2014-15, purchased 175,000 tonnes of wheat, mainly from Russia, but with 60,000 tonnes bought from Romania.
Expectations for Russia's grain exports have risen with harvest expectations, with the country's farm ministry on Tuesday raising to 27.5m-30m tonnes its forecast for shipments this season, from a previous estimate of 25m-27m tonnes.
In July, Russia exported a record 3.2m tonnes of grain, including 2.7m tonnes of wheat.
However, French wheat ï¿½ signally absent at the previous two tenders ï¿½ was also offered, and at prices, excluding freight, not far above the winning lots.
Soufflet offered French wheat at $249.47 a tonne, just $0.56 a tonne above a winning Russian wheat bid by Bunge, although lower shipping costs from the Black Sea to Egypt also favour the former Soviet Union country.
Three further cargos of wheat from France, the European Union's top producer and exporter of the grain, were tendered too.
The offers came despite concerns over the availability of French milling wheat after a harvest marred by late rains, sparking ideas that only one-third of the crop would be fit for meeting specifications demand by major importers.
Indeed, traders at a major European commodities house identified a "certain element of panic amongst French shippers and merchants", which have imported better-quality wheat in an effort to beef up the quality domestic supplies.
"Further evidence of the chaos in France was seen when a large cargo of Lithuanian milling wheat turned up to discharge in Rouen, presumably to be blended with poorer quality French wheat before being re-exported," the traders said,
"The French even bought two small cargoes of UK soft wheat, although it is difficult to understand what use they might have for it and it is by no means certain that they will take any more."
The potential for French merchants selling wheat blended from multiple origins prompted Algeria's OAIC grain authority, which has stringent import criteria, at the weekend to caution against mixing grains.
"Any mixture of wheat detected ... will force us to reject shipments on one hand but also to permanently eliminate suppliers concerned," the OAIC said in a letter sent to trading houses.
Gasc's specifications state that the port where wheat is loaded "should be in the same country of the origin of the goods".