International wheat markets may find support from a couple of large tenders. Pakistan are in for 750kt according to some analyst, the official number appears to be 300kt. Looking at the way the government is trying to distribute what wheat it has access to maybe indicating that the 750kt figure is more believable.
The Pakistan tender comes at the same time that the government is expected to release state owned and seized wheat onto the local market in an attempt to bring flour prices down.
Algeria announced a 50kt tender. Algeria is known to buy in multiples of 50kt at these tenders, often picking up 500kt+ at a time. Algeria do not make public their tender results but the tenders are often followed by trade reports that build a consensus on what was bought, and at what price. Current procurement estimates have that volume at 510kt, and valued at something closes to US$320 C&F. On the back of an envelope this converts to roughly an ex farm equivalent price here on the plains of AUD$340 to AUD$350, not terrible.
The tender value is roughly US$30.00 above their last tender back on the 5th of August. This move is comparable to the move in US HRWW futures during this time frame, +81c/bu in the Dec contract. US HRWW does not work at the tender value, it would be roughly US$30 higher than US$320 C&F. Interestingly Canadian DNS wheat could potentially work as could French. The punters are expecting Black Sea wheat out of the Danube region to fill the contract. Currently Romanian wheat FOB Constanta is valued at roughly US$282. That leaves US$38 for freight and costs. Back in July freight rates went sharply higher than the then US$27. If it is Black Sea supply one can only assume that a freight deal was made prior to a recent run up in execution costs out of the Black Sea. Either way, there are alternative origins that work.
US wheat futures moved higher, spring wheat the leader. Troubles in Canada appear to be pushing premium wheat values higher. Maybe we’ll see the premium US HRWW has established over spring wheat get eroded through higher premium wheat values, not falling HRWW values as previously assumed