Egypt purchased a large batch of Russian wheat, which increased the pressure on world quotations

The state-owned Egyptian operator GASC purchased at an international tender on February 3 535,000 tons of Russian food flour wheat with shipment from February 26 to March 20 at an average price of $324.18/t C&F, which is 4% lower than at the January 11 auction, when purchased 120,000 tons of Russian food wheat with shipment on February 10-25 at an average price of $337/t C&F. We will remind that GASC purchased 200,000 tons of Russian wheat at the tender on December 29 at a price of $339/t C&F. This testifies to the significant export potential of Russian wheat and the willingness of traders to lower prices in order to activate sales of significant stocks.

The following batches of grain were purchased at the tender on February 3:

• Grainflower has 180,000 tons (three batches of 40,000 tons and one batch of 60,000 tons) at a price of $323.4/t with delivery from February 26 to March 10 and 180,000 tons (three batches of 40,000 tons and one batch of 60 thousand t) at a price of $322.8/t with delivery from March 11 to 20;
• at the Aston company at a price of $324.45/t, 60,000 tons with delivery from February 26 to March 10 and 60,000 tons with delivery from March 11 to 20;
• the Sierentz company has 55,000 tons at a price of $325.8/t with delivery from March 11 to 20.

The World Bank will finance these deliveries, so the payment will be made immediately, and not with a delayed payment, as usual.

Wheat quotations on world exchanges last week supported forecasts of severe frosts in the United States, which could damage winter wheat crops covered with a light layer of snow. But temperatures are expected to rise this week, so the speculative weather factor will disappear and markets will be under pressure from the USDA’s updated global balance sheet due on February 8.

In Kansas (a major wheat-producing state), the number of winter wheat crops in poor and very poor condition increased from 43% to 47% compared to the end of November, while the number of crops in good or excellent condition remained at 21%.

On Friday, stock quotes fell:

• by 0.6% or $1.56/t to $278.1/t – March futures for soft winter SRW wheat in Chicago (+0.6% for the week);
• by 0.9% or $2.85/t to $320.8/t – March HRW hard winter wheat futures in Kansas City (0%).
• by 0.4% or $1.19/t to $338.6/t – March futures for HRS durum wheat in Minneapolis (0%).

At the same time they grew up

• by $0.25/t to $303.25/t – February Black Sea wheat futures in Chicago (0%).
• by €1.5/t to €284.5/t or $307.11/t – March wheat futures on Paris Euronext (-1%).

According to Rusagrotrans analysts, export prices for deliveries of Russian wheat with a protein of 12.5% in February fell by $3/t to $302/t FOB for the week. The export of wheat from the Russian Federation in January, including the EAEU countries, reached a record 4.17 million tons, and in February it may amount to 3.97 million tons compared to 2.36 million tons in February 2022.

Tags: Russia, Egypt, prices, wheat