Black Sea escalation halts Egypt’s wheat buying program

The latest military escalation in the Black Sea has significantly disrupted the grain market. Navigation disruptions and a sharp decline in the number of vessels willing to call at Black Sea ports have driven freight rates higher, pushing replacement values for both 12.5% and 11.5% protein wheat above $260/ton CIF Egypt.

The higher import costs have effectively suspended Egypt’s August wheat buying program, which had only recently resumed following the prolonged post-Ramadan slowdown. At the same time, domestic wheat prices have increased due to Black Sea tensions and the depreciation of the Egyptian pound, restoring positive import margins.

Improved margins are expected to accelerate the liquidation of accumulated wheat inventories while helping offset financing and storage costs incurred during the recent market slowdown. However, CIF wheat offers remain extremely limited, as only a small number of vessels are willing to operate in the Black Sea, leaving Egyptian buyers in a wait-and-see mode.

In the corn market, Egyptian importers remain focused on Brazilian new-crop supplies for September onward shipments. Replacement values continue to hover around $260/ton CIF amid CBOT volatility and persistently high freight rates from the East Coast of South America. Until Ukraine’s new crop becomes available, Brazilian corn remains the most competitive origin in terms of price and quality, although the gap between buyers’ bids and sellers’ offers remains wide.

Egypt’s soybean market remains relatively quiet. Crushers are largely covered through the end of September, while negative crushing margins continue to limit nearby buying interest. U.S. soybeans remain the most competitive origin from an execution standpoint, but replacement values have climbed to around $540/ton CIF Egypt following the recent Chicago rally driven by weather concerns in the United States and renewed Chinese demand.

Tags: Egypt, corn, prices, soybean, wheat