Price fall gets French wheat nearer Egyptian order


Egypt took its wheat-buying spree above 1m tonnes with further purchases from Romania and Ukraine, although French supplies, whose price is being depressed by improved harvest results, came closer into contention.

Egypt's Gasc grain authority, at its fifth tender since the start of last month, purchased 60,000 tonnes of wheat from Romania and Ukraine, for some $31.6m including shipping.

The purchase took to 1.08m tonnes the purchases by the world's top wheat buyer during the spree, at a cost of $285m, of which half have been bought from Romania, with Ukraine and Russia splitting the balance.

The average price of the wheat in the latest purchase was $250.93 a tonne excluding shipping, some $1.50 a tonne less than after the previous tender, last week.

'Much better proteins'

The decline is in line with a fall in futures prices, dragged lower by the blow to values of fellow-grain corn dealt by strong harvest conditions, and by some improved ideas of harvests in the US and the European Union.

Informa Economics on Monday upgraded its estimate for the US winter wheat harvest to a little above US Department of Agriculture estimates, although there remain concerns about levels of sprouting in the rain-beset soft red winter wheat crop.

Meanwhile, fears for the French crop have receded with the march north in the harvest, which has revealed better protein levels than the sub-11% ones unearthed in the south, and eased concerns of a squeeze on quality supplies.

"The latest reports from France suggest that the more recently harvested crops are showing much better proteins," traders at a major European commodities house said.

Agritel, the Paris-based consultancy, said that "wheat yields and quality are satisfying in the north of France, even after the bad weather conditions during spring and July".

Closer contention

Indeed, the price of French wheat tendered to Gasc by Louis Dreyfus was only $5.09 a tonne more expensive than the winning Romanian offer, although this does not take account of the extra shipping costs to Egypt from France, rather than from the Black Sea.

Last week, French wheat was more than $8 a tonne out of the running, and at the start of July was nearly $16 a tonne more expensive.

Paris wheat futures for November hit E183.00 a tonne on Tuesday, a contract low of the lowest for spot lot for 19 months.

The contract revived some ground to stand at E183.75 a tonne in late deals, a fall of 0.1%.