Russian and French Wheat Prices Hit by Egypt's Disappearance

  • Egypt's state grain buyer canceled three tenders this month
  • Wheat spot prices in port of Novorossiysk fall to $179 a ton

Egypt’s failure to buy wheat is hurting prices for some of its biggest sellers, Russia and France.

In Russia, spot wheat prices on a free-on-board basis fell 1.1 percent last week to $179 a metric ton, bringing prices closer to a five-year low, according to data from the Moscow-based Institute for Agricultural Market Studies. While milling-wheat futures in Paris rebounded in recent days, the March delivery contract is down 11 percent this year.

Egypt’s state grain buyer scrapped a wheat tender on Sunday after traders offered fewer cargoes than usual and at higher prices, marking the third cancellation this month. Grain suppliers are worried that Egypt will refuse their shipments after authorities turned away a delivery of French wheat by Bunge Ltd. for excessive levels of ergot, a naturally occurring fungus.

“The price looks quite depressed and flat in terms of forward contracts,” Dmitry Rylko, the director at the Institute for Agricultural Market Studies in Moscow, wrote by e-mail on Monday.

The failure by Russian exporters to win new business from Egypt is weighing on the export outlook, Rylko said. Egypt’s Global Authority for Supply Commodities, which runs the international purchases, only bought one cargo of Romanian wheat in the last tender and last purchased Russian grain on Jan. 21.

Russian prices of milling wheat with 12.5 percent protein fell by $2 a ton in the port of Novorossiysk to between $180 and $181 a ton for delivery in February or March, according to a report Monday from UkrAgroConsult.

In Paris, wheat futures for delivery in March fell for the first day in three, declining 0.6 percent to 154.50 euros ($172.72) a ton. Wheat for loading in the French port of Rouen with minimum 11 percent protein was priced at $173.64 a ton on Monday, down 4.2 percent from the start of the year, according to crop office FranceAgriMer.

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