European wheat again won the Russian wheat at the tender in Egypt

On August 30, the Egyptian GASC held the third tender for the purchase of wheat in a month, in which European wheat competed strongly with Russian wheat, and confidently won.

The authorities of the Russian Federation do not confirm the establishment of the minimum selling price for wheat on the world market for exporters, but in the new tender, as in the previous one, all batches of Russian wheat were offered at a price of $270/t FOB. The ban on Russian traders lowering wheat prices allowed European exporters to increase sales, so Russia's attempt to warm up world wheat prices failed.

The number of submitted bids compared to the August 22 tender increased sharply from 32 to 45 (18 bids at the 08/08/23 auction), especially French and Romanian wheat, while prices fell from $263.77-$280/t FOB to $259.42 -271 $/t FOB (262-305 $/t FOB at tender 08/08/23).

The following applications were submitted to the tender:

• from the Russian Federation – 25 (15 at previous auctions) lots at a price of $270/t FOB ($270/t at the tender on 08/22/23 and $262-275/t at the tender at 08/08/23),
• from Romania – 8 (5) batches at a price of 261-271.6 (265-272 at the auction on 08.22.23 and 269 and 275 at the auction on 08.08.23) $/t FOB,
• from Ukraine – 1 (2) batch at a price of $269.5 (269.8 at the auction on 08.22.23 and 278.4 and 284.1 at the auction on 08.08.23) $/t FOB,
• from Bulgaria – 2 (4) batches at the price of 263.77 and 267 (263.7-271 at the auction on 08.22.23) $/t FOB,
• from France – 9 (6) lots at a price of $259.42-267.69 (266.82-272.82 at auction on 08/22/23) $/t FOB.

The number of offers for French wheat increased sharply, and the price of $259.42/t FOB was the lowest offered compared to the price of Russian wheat at $270/t FOB.

As a result, GASC purchased 240,000 tons of European wheat, including 120,000 tons of French wheat for October 5-20 delivery at $279.49/t C&F and 120,000 Romanian wheat for October 25-November 10 delivery at $275.75 /ton of C&F, which is 2% and 3.4% higher, respectively, than the purchase price of the tender on 08/22/23 (where the 1 cheapest lot of Romanian wheat was contracted) and corresponds to the purchase price of Russian wheat at the tender of 08/08/23, which was 278.5 C&F ( $262/t FOB + $15.74/t freight) with payment within 180 days.

World wheat prices will continue to fall in the near term under pressure from increased supply of the new crop and weak demand from buyers.