Egypt Buys 180,000 Tons of Wheat as Futures Near Five-Year Low

  • Egypt's GASC bought grain from Romania, Ukraine in tender
  • Wheat futures traded in Chicago earlier touched five-year low

Egypt, the world’s largest wheat importer, bought 180,000 metric tons of the grain after benchmark Chicago futures dropped to the lowest in more than five years.

The General Authority for Supply Commodities bought Romanian and Ukrainian wheat at an average price of $184.71 a ton including freight, the state-run buyer said Wednesday. The tender was for April 5 to 14 shipment. Prices in Chicago earlier touched the lowest since June 2010, before rebounding.

“Egypt wants to benefit from the decline of the market," French farm adviser Agritel said in a report Wednesday, before the tender results were announced.

Wheat is down 4.3 percent this year on the Chicago Board of Trade as U.S. stockpiles keep swelling due to cheaper prices in other producing nations. Futures for May delivery were up 0.9 percent at $4.50 a bushel by 10:29 a.m. in Chicago. In Paris, milling wheat for the same month dropped as much as 1.5 percent to a three-week low of 151 euros ($164) a ton.

GASC bought three shipments of 60,000 tons each. Ameropa AG and Cerealcom Dolj both sold cargoes of Romanian wheat at $184.38 a ton including freight, according to two traders with knowledge of matter who asked not to be identified because they’re not authorized to speak to the media. Louis Dreyfus Commodities BV sold Ukrainian wheat at $185.38 a ton, the traders said.

No French

There were no offers of French wheat. Traders have been reluctant to provide grain from France since Egypt rejected a cargo supplied by Bunge Ltd. due to a dispute over the levels of ergot, a naturally occurring fungus. Soufflet has been the only company to offer French grain in the past few tenders.

"Traders prefer to be sure the quality will be OK, so they are offering origins other than French," Pierre Tronc, a broker at Aurel BGC in Paris, said by e-mail. "French wheat has a bigger risk of ergot fungus."

French grain with a minimum 11 percent protein content for loading at the port of Rouen was at 147.24 euros a ton Wednesday, according to data from the Office National Interprofessionnel des Grandes Cultures. That means the nation’s supplies are competitive with grain from the Black Sea Region, which usually benefits from a lower freight rate to Egypt.

Wheat prices have declined as favorable weather improved crop conditions, Commerzbank AG said in a report Wednesday. U.S. grain is facing more competition "because prices in Europe are also nose-diving at the same time," the bank said.

In France, cooperatives remain concerned about the level of stockpiles unsold, said Arnaud Saulais, a broker at Starsupply Commodity Brokers.

In other markets:

  • Corn for May delivery added 0.3 percent to $3.5675 a bushel in Chicago.
  • Soybeans for the same month gained 0.7 percent to $8.64 a bushel.
  • Soybean meal for May climbed 1.4 percent to $265.20 per 2,000 pounds.
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