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?