Archer Daniels Midland won its first wheat orders of the new season from Gasc at a tender notable for showing contrasting price movements for Romanian and Russian grain – and a dearth of offers from France.
Gasc – the grain authority for Egypt, the top wheat importing country – at its third tender of 2016-17 purchased 120,000 tonnes of wheat from ADM, half sourced from Romania and half from Russia.
The Russian wheat was offered at $168.85 a tonne, excluding freight, a discount of more than $4 a tonne on the price that ADM presented to Gasc’s previous tender, on July 16.
Other merchants, such as Daewoo and Midgulf, offering Russian wheat also cut their offers from last time, although by lesser amounts.
‘Far more shallow pool’
However, details of the Gasc tender showed a rise in prices of offers of Romanian wheat, taking them above Russian prices, unlike at the last tender.
“Romania has a far more shallow pool of wheat to export, and demand signs look relatively strong, so it is perhaps not so surprising that its prices are proving relatively buoyant,” a UK-based grain trader told Agrimoney.com.ADM’s increase of a little over $1 a tonne, to $169.90 a tonne, in its offer price was notably less than the increases of nearly $4 a tonne made by Casillo, and of more than $7 a tonne imposed by Ameropa.
Romania has also won an unusual order of 55,000-60,000 tonnes from buyers in France, thought keen to prop up supplies of higher quality wheat in the face of a rain-compromised domestic crop.
“Russia has got loads to shift, so you can understand their prices coming down a bit,” with the country expected a record wheat harvest estimated at 69m tonnes on Wednesday by Ikar.
Thursday’s tender result means that, of 600,000 tonnes of wheat Gasc has bought so far in 2016-17, which started this month, all has come from Black Sea origins – half from Russia, 240,000 tonnes from Romania and one cargo from Ukraine.
Ukraine wheat, offered by Venus at $165 a tonne, was actually the cheapest at the Gasc tender before freight, but rendered less competitive by the increased costs of shipping from the country to Egypt, of approaching $13 a tonne.
Freight from Romania or Russia to Egypt was quoted at about $8 a tonne.
And it is in fact typical for Black Sea origins to dominate early-season Gasc tenders, with exporters keen to get shot of supplies before winter snarls up transport.
However, offers from France – the European Union’s top wheat exporting country, and typically a major origin for Gasc purchases – are also often seen at this time of year, but were notably absent at Thursday’s tender.
In a late-July tender last year, the authority received offers of 120,000 tonnes of French wheat.
The lack of French offers come amid doubts over the country’s export campaign, given a soft wheat harvest which looks like coming in well below last year’s record crop, pegged by the official FranceAgriMer bureau at 40.9m tonnes.
ODA overnight estimated the French harvest at 30.5m tonnes, with the potential for a downgrade to 29.5m tonnes.
(Source – http://www.agrimoney.com/news/romanian-wheat-prices-rise-overtaking-russian-ones–9792.html)