Egypt picked up 480kt of Russian wheat earlier in the week at US$265. This was a private sale, not done by public tender. There are now reports that Egypt will again return to the market for more wheat tomorrow, this time by public tender. Year on year Egypt increased wheat imports from 6.43mt to 8.34mt, the lions share going to Russia. Egypt accounts for around 36% of Middle East wheat demand.

Dry weather across S.America, both Brazil and Argentina, is starting to create concern for both the area of the corn crop in Argentina and wheat production both there and to the north in Brazil. Last year Brazil produced a bumper wheat crop. At 10.6mt it was almost 3mt larger than the previous year. This reduced imports year on year by roughly 1.39mt, or roughly 12%. Brazil consumes just under 12mt of wheat pa. With Argentine wheat production expected to fall from the current USDA estimate in the September WASDE of 16.5mt, to less than 15mt, it will still allow Argentina to cover any demand coming from Brazil, if any. Argentina consumes roughly 6.5mt of wheat, carry in there is estimated ta 3.43mt so even with a lower production estimate there will still be plenty to go around.
With falling estimates in Australia and Argentina and quality issues in Europe and Kazakhstan it is putting an emphasis on quality for the southern hemisphere crops. Being so dry in Australia, domestically this is of some concern, but not a major concern, as dry weather is driving feed demand. From a global perspective though the first half of next year is likely to see the hunt for quality to blend with lower grades a factor to consider for some.

US, Paris and London wheat futures were all lower in overnight trade. The punters expecting to see a rise in ending stocks in this weeks WASDE.