- Today has seen another Egyptian purchase of wheat, unsurprisingly from the Black Sea! This time, the fifth since late August, 115,000 mt went to Ukraine and 60,000 mt each to Russia and Romania. French offers were some $3/mt higher on an FOB basis, but the additional $6 or $7 on freight meant they were close to $10 out basis C&F.
- In France, cash premiums for wheat declined as their estimated output was increased by 900,000 mt to 37 million mt, which compares with 35.5 million mt last year. (This figure is still lower than a number of private estimates.) Th bigger picture suggests that a larger EU crop will result in a lower need for French imports and the increased French crop has left the trade talking of a 12 million mt exportable surplus, an increase of 2 million mt over last year.
- Whilst EU exports are running over 2 million mt ahead of last year the French share is only 400,000 mt of this. The lack of competitiveness in Egyptian tenders will leave the S&D heavy on the supply side!
- Other news includes the increased forecast by Brazil’s Conab (government crop supply agency) in 2012/13 corn output to even higher record territory, their latest estimate has reached 81.3 million mt, an increase of 1 million mt from their August estimate. At the same time they reduced the 2013 wheat crop estimate to 4.95 million mt from 5.62 million mt.
- Brazil has expanded a duty-free wheat import quota through to end November by 400,000 mt after severe frosts blanketed the country’s main wheat belt in the past two months and as its main supplier Argentina is struggling with its own shortages. The expansion takes the quota to 2.7 millions mt. Brazilian flour mills have already purchased 2.3 million mt of US and Canadian wheat for import under the quota, which exempts the wheat from a common import tariff of 10 percent. Brazil is often among the top two or three wheat importers in the world. As members of the Mercosur customs union, grain trade between Brazil and Argentina is tariff free.
- We, like the rest of the trade await the USDA report which is scheduled to be published at 5pm (UK time) on Thursday.