News today in the aftermath of the USDA’s report includes a further Egyptian tender, this time for 235,000 mt for Nov ’12 shipment. Russia was awarded 120,000 mt, France 60,000 and Ukraine won the final 55,000 mt. Russia managed to hold on to sales due to its competitive freight position but observers believe the pace of exports is losing its edge. The winning Russian bids were some $6/mt higher than the last tender just two days ago. Clearly Egypt are keen to get tonnes on board before that competitive edge disappears totally. The total Egyptian purchases in the last five weeks amounts to some 1.7 million mt.

Harvest pace in the UK has picked up in the recent spell of better, drier weather permitting some “catch-up” to take place. Whilst acres have been cut it has not led to improved quality and we continue to hear of low specific weights and claims against contract quality. New contracts are being negotiated on a reduced specification to avoid the necessity for large claims and millers are reducing their purchasing qualities to gain supplies at home whilst at the same time seeking better quality supplies from overseas to supplement their grists.

Strategie Grains have reduced their estimate for EU corn and wheat output adding pressure to global prices. Corn output was trimmed substantially by 4.3 million mt to a five yea flow of 53.5 million mt as the persistent hot and dry conditions in south and central Europe last month led to poor grain filling. This leaves the crop some 19% lower than a year ago and leaves the way open for imports to rise to over 8 million mt. Interestingly, this estimate is 3.8 million mt below yesterday’s USDA estimate.

Wheat estimates from Strategie Grains also cut 1.7 million mt from the EU harvest to 123.6 million mt. The commentary continued with a conclusion that exports would have to be cut and usage curtailed if minimum “pipeline” stock levels were to be maintainable. All in all, this can only be construed as “bullish” for prices going forward.