Wheat quotations increased after Egypt purchased 420,000 tons of Russian wheat

Wheat futures in Chicago are trading at the highest level in 4 months, supported by increased export sales of wheat from the US to China and the results of the latest tender in Egypt, where 420 thousand tons of Russian wheat were contracted at a higher price.

Egypt's GASC yesterday held the second tender this week for the purchase of wheat with delivery on January 10-20 and 21-31. There were 9 offers for Russian wheat at a price of $260/t FOB with 180 days payment or $265/t FOB with 270 days payment, 3 offers of French wheat at a price of $268-272/t FOB, while the cheapest offer of Romanian wheat had a price of $275/t FOB with payment of 180 days ($325/t FOB with payment of 270 days).

In the end, GASC purchased 420,000 t of Russian wheat at a price of $265/t FOB with 270 days payment + $21/t freight = $286/t C&F, while the purchase price at the December 5 tender was $275.17/t C&F.

In addition, Pakistan is conducting a tender for the purchase of 110,000 tons of wheat, Bangladesh - 50,000 tons of food wheat, and Lebanon - 30,000 tons of food wheat.

March wheat futures rose in price by 1.4-5% during the week, in particular yesterday:

• by 1.4% to $236/t - for soft winter SRW wheat in Chicago (+5% since the beginning of the week),
• by 1.7% to $245.3/t - for HRW hard winter wheat in Kansas City (+3%).
• by 0.9% to $270.9/t - for hard spring HRS-wheat in Minneapolis (+0.7%).
• by 0% to 232 €/t or 250 $/t - for wheat on the Paris Euronext (+1.4%).

EU countries in the 2023/24 FY as of December 3 compared to the same period last year reduced wheat exports by 19% to 12.92 million tons, but increased imports by 30% to 5.35 million tons, of which 64.5% or 2.5 million tons were supplied from Ukraine (+14% for the year) and 6.5% or 250.4 thousand tons - from the Russian Federation, which is 2.5 times more than last year.

According to Eurostat, the EU sharply increased grain purchases from the Russian Federation - by 22% in a month and 10 times in a year - to 180,000 tons, which is the highest indicator since March 2022. Now the Russian Federation has become the fourth and largest exporter of grain to the EU.

In the AMIS report, the UN increased the forecast of world wheat production in 2023/24 from 785.1 to 787.1 million tons, which would be 2.1% lower than the previous season's 804.1 million tons. The increase in harvest in the Russian Federation by 1 million tons and in Turkey by 1.3 million tons partially compensates for the reduction in production in Brazil and Argentina.