Egypt surprised the wheat market last night as they play catch up after their ergot fiasco earlier in the year. Offers against Egyptian tenders evaporated earlier this year after officials placed a 0% tolerance on ergot. The world standard is 0.05%. This saw Egypt fail to fill a number of tenders and sellers simply refuse to offer as vessels began to be turned away by Egypt.
Last night saw Egypt pick up 780kt in one order out of the Black Sea. This is the biggest single order Egypt has placed in a few years.
Russia and Romania were the key suppliers. Egypt is still around 350kt behind the same period last year so we should see more activity again in the short term.
The cheapest wheat was sold by Louis Dreyfus at US$182.74 plus US$10.30 freight. Prices ranged by roughly US$3.00 / tonne. These prices are equivalent to about AUD$190 / tonne NTP Newcastle, so roughly AGP1 values. It’s also US$4 higher than previous business into Egypt from the Black Sea
Stronger soybean futures also helped the grains complex higher. Canola obviously caught a lift on soybeans and closed higher at both the ICE and Paris markets. There are a few key issues forcing oilseeds higher but the problems with the Canadian canola harvest is the major concern.