Interesting Development
19/07/11 -- My friends at the APK-Inform Information Agency are reporting that Ukraine has been added back onto Egypt's list of approved wheat suppliers.
That looks like a pretty canny move to me. In the past couple of tenders Russia (Matalan) has only had itself to compete with for the Egyptian business. Now that Ukraine (Primark) has been invited to join the party it's got to make sure it keeps those prices nice and low.
Meanwhile France (Marks & Spencer) and the US (Next) are just going to have to sit around and content themselves with the odd bit of passing trade unless they fancy holding a fire sale.
Egypt - Bullish Or Bearish?
31/01/11 -- The market seems to be struggling to weigh up the impact to mounting civil unrest in Egypt. The most populous Arab nation on the planet is not only the world's largest wheat buyer, but the also hold the keys to the Suez Canal.
Brent crude came within a whisker of breaking through USD100/barrel for the first time in more than two years on Friday, peaking at USD99.97/barrel, on worries that a further escalation of the violent anti-government protests there could disrupt traffic passing through the Suez Canal.
That may affect the supply of oil from the Persian Gulf into Europe, hence the hefty USD10/barrel premium for Brent over NYMEX crude at the moment.
Egypt said over the weekend that it won't step-up on it's regular wheat purchases, but that it will continue to buy "the usual quantities". The market seems to have been expecting them to follow Algeria & Tunisia and increase their buying, but so far no tenders have been forthcoming.
There are question marks too over whether the continued unrest might disrupt import operations at major Egyptian ports. The North African country has reputedly bought over 2.75 MMT of US wheat so far this marketing year, and over 670 TMT of that is apparently still to be shipped.
There's an interesting situation developing here that's throwing up more questions than answers. Certainly I'd have thought that the government wouldn't want to cause further problems by disrupting the supply of state-subsidised bread to the masses.
It may however make exporters think twice about participating in future Egyptian tenders. Who's going to be in power next week and have they got the chequebook? How easy/expensive is going to be to charter a boat to go there? And what if the Suez Canal is closed when you've already sailed from say Australia?
Hmmm, here's another one: "I wonder if we can claim force majuere on this cheap stuff we've got sold to them and sell it elsewhere at today's prices instead?"
Egypt Buys US/Australian Wheat
08/01/11 -- Egypt, the world's largest wheat buyer, announced that it bought 175,000 MT of soft wheat for March shipment over the weekend.
Despite a freight advantage French wheat was outpriced by two 60,000 MT cargoes of Australian wheat sold by Cargill at USD313/tonne and USD317/tonne. The bent as a nine-bob note North African's also booked 55,000 MT of US wheat at a cent under USD317/tonne.
French wheat was priced around USD335-340/tonne.
The EU market may react with mild disappointment to the news when it re-opens on Monday. However EU wheat doesn't really need to compete at the moment, given the pace of export during the first half of the marketing year.
In addition, smaller consignments of EU wheat will continue to find homes amongst other North African buyers in 2011.
Egypt Shuns US Wheat In Tender
02/11/10 -- Egypt's state-owned wheat buyer GASC snubbed US wheat in today's tender, buying instead a combination of 230,000 MT of Argentine, Australian and French wheat for January shipment.
That's the first time they've bought Argentine wheat in as long as I can remember, and maybe indicates that there's still a bit of competition around for US wheat.
Reports out of Argentina suggest that very early wheat yields are extremely promising, with a crop of 12 MMT potentially on the cards.
Egypt
Have been reportedly offered wheat at varying prices starting at USD280/tonne in today's wheat tender. That's the same price it booked 240,000 MT of French wheat at over the weekend.
It would be interesting to see what happened if they passed, saying that the prices quoted were too dear. They've got six months worth of reserves anyway, and seeing as prices are now up by well over USD100/tonne from what they were paying in late June, that would be my strategy if I was them.
The trade seems to think that they have them over a barrel now that Russia is out of the market. A little reminder that they maybe aren't quite so vulnerable would shake things up a little bit on the eve of the USDA report.
What's Happened Over The Weekend
Everybody's least favourite uncle, Egypt, the one that kisses your Mum and sister just a little too enthusiastically at Christmas, New Year, birthdays and any other opportunity it can get has bought 240,000 MT of French wheat.
Paying around USD280/tonne for it equates to almost USD30/tonne more than they bought Russian wheat at just last Wednesday. Of course Russian wheat could be 50p/tonne, but that isn't much use if you can't actually get it.
The Gyppo's went on to say that they won't be buying any more wheat from Ukraine, Kazakhstan and Russia until those countries export position becomes clearer.
Squirming as uncomfortably as your Mum when Uncle Nomani eyes her up across the lounge, Egypt says that it now wants to reschedule more than half a million tonnes of cheap Russian wheat it now isn't going to get. Having to buy it in again is going to cost "between 2.5 and 4.5 billion Egyptian pounds" in 2010/11 it says, a significant sum that it would rather like to recoup back.
SovEcon dropped their estimate of this year's Russian wheat crop to 43-44 MMT. Meanwhile there's a bottleneck developing as the export deadline approaches.
Bangladesh say that they've got 400,000 MT of wheat on contract from the Black Sea but now only expect 100,000 MT of that to be delivered, certainly 120,000 of Ukraine wheat has been cancelled over the weekend.
Kazakhstan says that it isn't going to ban wheat exports, although it indicated in a roundabout way that if asked Russia would get preference over any other potential buyer.
It's All Kicking Off Again Then
Egypt are tendering to buy wheat again for the second time in a week. Dow Jones are reporting that the cheapest Russian grain offered today is USD252, a USD14 increase on the best offer they managed to pick up at the weekend.
Although the results of the tender haven't yet been announced, that offer is still significantly cheaper than the lowest-priced French wheat that was offered at the weekend.
The market doesn't seem to care if Russian wheat wins again and is behaving almost as if a Russian wheat embargo is a given before too long.
Indeed, one employee at Glencore's Moscow office who apparently made unauthorised comments to the media that the Russian government should not only bring in export bans but also allow suppliers to renege on contracts, might be picking up his P45 sooner than he thinks. Or at least finding that he's suddenly being transferred to the Siberia office where there's some important filing awaiting his attention.
This season's grain crop could only amount to 65 MMT, he said. That's the lowest estimate yet, but certainly not out of the question, and 10-12 MMT below the level of domestic consumption.
The attitude at the moment seems to be "let the Russians have the business, we'll wait for richer pickings elsewhere." That may arrive in the form of Tunisia, who are also in the market for a couple of cargoes of wheat themselves today.
A strong case could certainly be made for allowing traditionally cheaper Black Sea sellers to mop up some of these tenders now, with a view that they will either be sold out or have export bans in place by the new year. That could be when some really fruity prices end up getting paid. Even if we know that EU/US/FSU wheat plantings are sharply higher by then, that's not much use if you want wheat in Jan/Jun is it?
Are The Shops Still Open?
They are in Russia it seems, drought or no drought. Our old mates Egypt managed to pick up offers of USD238/tonne from Cargill and USD239.50/tonne from Bunge for Russian wheat over the weekend in their latest tender, according to GASC.
Those offers were around USD20 under the cheapest French wheat put up by Nidera on a two ports of loading basis.
Russia clearly hasn't sold out just yet, and what it has left to sell is still comfortably blowing EU (and US) wheat out of the water. The cheapest US wheat was USD262.25/tonne incidentally, and there's a higher freight cost to add on top of that too.
The Cargill offer of USD238/tonne represents a USD27/tonne, or 13%, increase on the cheapest wheat offered in their last tender a fortnight ago. As recently as the end of June they were picking up Russian wheat for only USD165/tonne.
Just Call Me Mystic Nog
I'm indebted to my chum Rudy at Bloomberg for being the first person to email me this breaking news.
Faced with the prospect of their chums at the five rouble store closing down prematurely, slimy no mates Egypt have suddenly decided that they will now allow French wheat shipments from more than one port after all.
With Russian wheat production estimates falling daily they appear to be suddenly looking to rekindle some old relationships, and realised that it's not always a buyers market.
I genuinely feel sorry for poor old Nomani Nomani, he must be sweating like a gerbil in a gay bar right now.
Egypt Buys Russian Wheat Again
Penny pinching cheapskates GASC bought two 60,000 MT cargoes of Russian wheat over the weekend at even cheaper money than they managed to cajole out of sellers last weekend.
USD165/tonne was the magic number this time round, which is now the equivalent of less than GBP110/tonne FOB, with the pound having firmed since the last tender was done.
The cheapest French wheat was almost USD12/tonne dearer than that, with US wheat coming in at USD15/tonne dearer, and that's before you add on a further USD20 or so freight differential.
Egyptian cargo superintendents inspect the latest arrival for brown envelopes.
Wheat Tenders Egyptian Style
There are some classic lines in this story on a new look Bloomberg site here, which suggests that Egypt would like to cast it's net a bit wider as far as wheat tenders are concerned.
“The origin countries are like my children and I would like to see all children equal in everything.”
I have this mental image of an aging overweight heavily hirsute mustachioed man smoking a cigar in a jacuzzi, dripping in gold chains and rings, whilst nubile eastern European "ladies" serve him champagne and "things".
"Come on in, the water's lovely, what harm could it do eh?" 
How Do You Confuse An Egyptian?
Despite continuing to buy Russian wheat at knock down prices that Europe and beyond can't and won't match, the penny doesn't yet seem to have quite dropped with the lovable Egyptians.
If you shop at the ten cent store, then you get a lame flea-bitten ten cent yak (probably called Emile), not a diamond encrusted gold-plated Rolls Royce:
Egypt to re-export a Russian wheat cargo
An Open Letter To GASC
Hello GASC
I am Nogger, Prince Noggger of Nairobi, son of the King of Nigera. Him very good man, but King he die last week in plane crash. Before he die he tell me, Nogger my son, I want you to take some wheat to Egypt for me.
So that is why I am being writing this letter to you my most loyal and trusted friends. King, he always say, Egypt man good man. Some Nigerian man bad men, they want to steal King's wheat, they come for me with guns. But I keep your wheat safe for you Mr GASC, like King ask me to do.
Please be sure that I ask you for no money, all I wish to do is carry out my father's dying wish to send his wheat to you. I have 60,000 MT of it, we grow it in Gobi Desert in north of my country. It is special place where nobody but King and me know for you isn't it. We grow lots of wheat there, it is good wheat like you good man.
I want to now send wheat to you so you make lots of bread, but I need to get boat, big boat. Remember I am giving you wheat for free, my very close friend and ally who I never meet. All I ask from you my men is small favour. Very small favour then I send you 60,000 MT free wheat is yours to keep. No money does not be sent, so you no worry need. We must keep secret from bad men who look for me with guns in internet cafe where I now must live.
Shhhh, my friends do not thank me, I do this dangerous thing for you. I risk my life for you, but I do not want money, no no, so stop saying I give you money, I not need money. Wheat is free for you my closest mucker and matey boys.
I want to send you wheat, but I cannot send without boat. Big boat, huge bloody great thing, big enough for fitting 60,000 MT of free wheat inside.
Is lucky for me, my uncle have boat, him good man too like you. He say he will lend me boat for free. No payee, payee. Buckshee, gratis, on the house me old China. So you see no money need change hands you get free wheat on free boat, is good deal for you yes? And you not get Russian or Kazakh wheat full of dog pooh pooh. This good clean Nigerian wheat on GAFTA terms.
OK, look you play hard ball, you nice man, if free too expensive I pay you. Is good deal yes? I pay you USD10,000,000 to take the stinking wheat, you happy now Mr Bigshot. Yes I pay, you no pay, I pay.
Please now, no thank me, no no. Just send me your bankcard details and I pay. Don't forget to include the three digits on the back.
I know that you will not let the King down.
Prince Nogger
Egypt Buys Russian/Kazakh Wheat At Throw Away Prices
Egypt's state-owned wheat buyer GASC seemingly continue to have the global wheat trade fawning all over them, picking up some ludicrously cheap offers.
They've just bought Russian and Kazakh wheat in their tender results announced today, taking one 60,000 MT cargo of each at the knock-down price of just USD166/tonne plus freight.
To put into context of just how cheap that is, it's the equivalent of only GBP112/tonne FOB.
At prices that low who wants a slice of that business? Let Russia and Kazakhstan have it I say. That seems to be the conclusion that others are coming to as well, as there weren't too many other origins put up. The cheapest French wheat was USD12/tonne adrift on price. Don't bother wasting the stamp next time lads.
You are sure that's proper milling wheat aren't you Egypt? You might be in for a nasty surprise when it gets delivered in a skip with an old settee and last year's Christmas tree poking out of the top of it.
It's just an idea, but it may be worth giving it more than a casual glance when it arrives. I'm sure it will be fine, but just to put your minds at rest, we don't want any nasty surprises do we? 
Russian wheat waiting to unload at Alexandria Docks
Egypt Rewrites The Wheat Rule Book - Again
After revelations earlier in the year that anything vaguely resembling wheat was good enough to clear Eygptian customs, things appear to have moved full circle.
Once-upon-a-time 54,000 MT of horse manure casually sprinkled with 1,000 MT of some moldy old feed wheat left over from three years ago would fly through as high grade milling wheat. Egypt now has some of the toughest contractual criteria in the world.
It's currently a buyers market, and Egypt as the largest wheat buyer in the world can afford to be picky.
New rules introduced last month dropped the maximum amount of bug damage from 2% to 1%.
Now the state-owned wheat buyer GASC is moving the goalposts again, insisting that the minimum tender quantity is 60,000 MT (they've previously been perfectly happy buying 30,000 MT cargoes), and also stipulating that vessels can only load from one single port.
The largest exporter of wheat to Egypt is Russia, with France the second biggest. Ukraine have long since been kicked into touch as consistently failing to deliver on quality. Australian and US wheat get a look in periodically, although freight isn't as cheap as it was from those destinations. Germany too feature from time to time.
GASC appear to believe that the recent changes will provide a cost saving, and make it easier to police the quality of imports.
The French aren't too keen, their major grain export facility of Rouen can't physically handle 60,000 tonners. Indeed only two ports can, according to Reuters - La Pallice and Dunkirk - and both of those involve increased shipping costs.
Even Russian exporters are saying that they'd frequently prefer to export in smaller lots, and that the new rules could push the rates for 60,000 MT vessels disproportionately high.
For now at least GASC aren't listening, but they may be forced to reconsider once faced with a situation where 30,000 MT tenders are significantly cheaper than 60,000 MT tenders. After all, cash talks - and cash was how this whole thing got started in the first place.
I See That The Egyptians Are At It Again
We've moved on a level or two from faking your own import documents and quality certificates here.
Egyptian politicians have called for the innovative Artificial Virginity Hymen Kit to be banned.
You think I'm definitely making this one up don't you?
Would I lie to you baby?
Egypt Seize French Wheat
In the latest twist to the ongoing saga of Egyptian wheat quality-control standards suddenly becoming the most exacting in the world, a 63,000 MT cargo of French wheat has been seized by the authorities.
The wheat, which arrived in the port of Sagafa on Sept 19, is said to contain 'poisonous' seeds at more than double the permitted limit of 20 seeds/kg.
It may be possible to removed the seeds by sieving to make it conform to GASC's exacting standards after which it may be released to enter the food chain or be re-exported, the local quarantine authorities say. The picky buggers.
Egypt Buys US/Russian Wheat
In a couple of tenders floating around Egypt's state-owned what buyer GASC said Wednesday it had bought 60,000 MT of US wheat, and two separate 30,000 MT consignments of Russian wheat.
The US wheat is for shipment Sep 21-30 and the Russian wheat is going to walk there of it's own accord stopping off for a rest on the way whilst it writes it's own export papers out. Probably.
Egypt To Issue Grain Import Blacklist
In the latest twist to the ongoing dispute over the quality of Russian wheat imports, Egypt's Chamber of Grain Industries is to issue a blacklist of wheat importers that it says have been known to violate import regulations.
Any guesses as to who might be on it?
Someone who's missed more dinners than Bobby Sands?
Egypt Shuns Russian Wheat Again
Just in case you missed it, Egypt shunned Russia for the third time in recent weeks yesterday, buying US and French wheat in a tender. Of the 175,000 MT taken 120,000 MT was French wheat at a reported price of USD186.45/tonne, despite reports that Russian wheat was offered as low as USD169 in the same tender.
It would appear that, despite both sides protestations to the contrary, Egypt does still have a problem with Russian wheat.
Incidentally my information is that the USD169 offer, which was the cheapest on the table, was from Cargill not an Egyptian trading house. That would seem to me to enforce the view that the current problem is one of country of origin, not names.
How long this will go on for is anybody's guess, I'm sure that in the long run Egypt must realise that it needs Russia, just as much if not more so, than the other way round.
Still, lets enjoy EU wheat getting a look in whilst we can.
