Algeria is said to have picked up 600kt of milling wheat overnight. Algeria do not make tender results public, price or volume, so the price and volume are estimates acquired from market sources. Algeria purchased wheat on both Wednesday and Thursday, probably not the best decision considering Egypt also came to the plate on Thursday for 180kt.
Algerian business was said to have been booked around US $345 C&F. There is talk of the wheat being Black Sea origin but this hasn’t been confirmed. This is probably right though considering the Egyptian business was covered by Romanian wheat at US$338.55 C&F.
The increase in international wheat interest spurred US futures markets along allowing Chicago futures to claw back a reasonable slice of Tuesday decline.
Both Algeria and Egypt may have been trying to time a break in the rhetoric between Russia and Ukraine to purchase and they may have just timed it right. Overnight “increased tension” on the Ukraine border has the “war” back in the headlines. There are some reports that it was the Ukraine gov attacking the separatist though, so we’ll see what the next 48 hours brings.
While ever the UK and US poke this with a stick Putin is unlikely to be provoked, not that the west needs any evidence to evoke a reaction but the loser of any conflict in the region certainly is not the west. After the last two years trying to find the truth in any matter is getting hard.
In the meantime the spike in wheat futures and the following increase in global markets continues to present opportunities for both old and new crop wheat.
We may not see increases / declines reflected in local markets dollar for dollar here but bullish sentiment is still better than bearish.