Flagging wheat futures found fresh strength after Egypt’s Gasc made one of its biggest purchases from the US in years – at prices well below those offered to an abandoned tender last week.
Gasc, grain authority for the world’s top wheat-importing country, purchased 290,000 tonnes of US supplies of the grain on Tuesday, at a US-only tender.
That is as much as Gasc had purchased from the US in 2013-14 and 2014-15 combined, up until now.
The result contrasted with a tender last week at which Gasc made no purchases, citing the “high prices” of cargos offered, of $287 a tonne or more, including freight.
More offered, cheaper
This time, Gasc received more than twice as many offers as the four cargos offered last week, and with prices as low as $271.44 a tonne, including freight.
That is still some $30 a tonne more than the authority paid last week for European Union wheat, a gap accounted for only in part by the higher cost of shipping wheat across the Atlantic.
It costs some $20-24 a tonne to ship wheat to Egypt from the US, compared with less than $8 a tonne from Romania.
Nonetheless, Gasc’s purchases on Tuesday were of hard red winter wheat, offering higher protein levels than the soft wheat it typically purchases at tender.
Tuesday’s purchases took Gasc’s total wheat acquisitions at tender so far in 2014-15 above 4m tonnes by volume and $1bn by value.
Gasc had been expected to make US purchases, to take advantage of a $100m credit line offered by Washington.
In Chicago, soft red winter wheat futures for May, which had been showing only small gains before the tender result, bounced to $5.10 ѕ a bushel, a gain of 1.5%.
Hard red winter wheat futures for May, as traded in Kansas City, hit $5.47 ј a bushel, a 2.1% gain on the day.
(Source – http://www.blackseagrain.net/novosti/egypt-places-big-us-wheat-order-after-prices-lowered)