Cancellation of tender in Egypt accelerates fall in wheat prices

Favorable weather in the EU, Ukraine and Russia against the background of data on an increase in sowing areas increases pressure on grain markets, and the cancellation of the tender by Egypt will accelerate the fall in prices for Black Sea wheat.

Egypt's GASC yesterday canceled a tender for the purchase of food wheat for delivery in August, as due to a sharp increase in the cost of freight, the lowest offer price was $2.26/ton higher than the purchase price of previous auctions at the end of May, although on the FOB basis, offer prices fell following a decrease in quotations on World exchanges.

Under pressure from increased forecasts for wheat production in Russia and increased competition from Romanian wheat yesterday on the Chicago Stock Exchange, July futures for Black Sea wheat fell by 3 3.25/ton to.247.5/ton, and December – by. 5.75/ton to. 257.25/ton.

Supply prices for Black Sea Food wheat of the new crop decreased to 2 250/ton FOB, and demand prices – to.245/ton FOB, while feed wheat prices are 8 8-10/ton lower.

As of June 15, 13.1 million hectares or 103% of the planned area were sown with spring wheat in Russia, which is 5.6% more than 12.4 million hectares in 2020. Winter wheat sowing areas also increased by 1 million hectares compared to the previous season. Favorable rains in the southern and central regions of Russia lead to higher crop forecasts, but excessive precipitation in the south can dramatically worsen the quality of grain, in particular the protein and gluten content.

Heavy precipitation forecast for next week, especially in the south of the country, may significantly increase the share of feed wheat in the new season.

American wheat is getting cheaper after the corn market, despite the deterioration of crops and heat forecasts until the end of the week.

July US futures fell yesterday:

• by 4 4.78 / ton to Чикаго 243.05/ton for soft winter SRW wheat in Chicago,
• by 5 5.60/ton to.225.14 / ton for hard winter HRW wheat in Kansas City.

Hard spring HRS wheat rose in price by 0 0.46/ton to.274.75/ton in Minneapolis.

DRV increased its forecast for wheat production in Germany in 2021/22 MG by 1.4% to 22.98 million tons, which is 3.8% higher than last year.

• September wheat flour futures for MATIF fell by €3.25/ton to €206.75/ton or € 250.3 / ton.

The Iranian state Trading Corporation (GTC) on Wednesday plans to complete a tender for the purchase of flour – milling wheat of any origin with shipment in July-August, which will become a new indicator for the prices of European and Black Sea wheat.