Egypt bought wheat $5/t cheaper than at the previous auction, which increases the pressure on global quotations

Egypt's state-owned operator GASC bought wheat at the tender at a price $5.3/t lower than the previous auction, adding further pressure on stock prices, which continue to fall, amid weak global demand.

The tender offered 7 batches of Russian wheat at a price of $317.5-332.4/t, 5 batches of Romanian wheat at a price of $321.7-339/t, 2 batches of Bulgarian wheat at a price of $324.77-328.5/t t, 1 lot of Ukrainian wheat at $329/t, 1 lot of French wheat at $341.9/t (all on a C&F basis), and Black Sea wheat prices were generally at the same level.

As a result, GASC purchased 240,000 tons of Russian wheat for April 1-15 delivery from Grain Flower at a price of $317.5/t C&F, which is $5.3/t lower than the purchase price at the previous auction on February 3, where it was contracted 535 thousand tons of Russian food flour wheat at an average price of $324.18/t C&F.

Wheat prices are falling amid low demand and a significant supply of cheap Russian wheat, and have lost 4-5% for the week, with the results of the tender accelerating the decline.

Yesterday prices fell:

• by 1.7% or $5.24/t to $316.6/t - March HRW hard winter wheat futures in Kansas City,
• by 0.7% or $2.3/t to $333.6/t - March futures for HRS durum wheat in Minneapolis,
• by $0.25/t to $300.25/t - March Black Sea wheat futures in Chicago.

At the same time grew:

• by 0.2% or $0.64/t to $271.3/t - March futures for soft winter SRW wheat in Chicago,
• by €3.25/t to €284.25/t or $301.3/t - March wheat futures on the Paris Euronext.

Ukraine began negotiations with the UN and Turkey on the extension of the grain corridor for another year with a proposal to include in the agreement the operation of new ports, in particular Mykolaiv, and to speed up the inspection of ships to reduce their downtime. If the agreement is approved, the volume of offers from Ukraine will increase, which will further increase the pressure on global quotations, especially against the background of the long-term decline in prices for Russian wheat.

It is worth noting that on the Matif exchange, wheat is traded €10/t cheaper than corn, as the demand for wheat has already fallen, while the demand for corn is still there.