Source: Ukragroconsult (Ukraine)
European wheat futures rose on Tuesday after Egypt sparked the market by announcing an import tender to buy a large amount of Wheat surprised with a delay in delivery.
However, the price increase was moderate. Traders struggled to understand the announcement, which violated Egypt's usual tender conditions, and some doubted that the country would be able to deliver the hoped-for maximum volume of 3,8 million metric tons. Tonnen to obtain.
At the start of the day, Euronext was stable, supported by a weaker Euro and a recovery in the dollar after a broad sell-off in financial markets on Monday fueled by recession fears.
Wheat futures for September rose 1,2 percent to 218,25 euros ($238,50) per Tonne.
Prices continued to rise after the Egyptian state buyer GASC announced that it will hold a tender on August 12. The tender covers up to 3,8 million tonnes to be delivered between October and April, with suppliers required to receive payment within 270 days.
The departure from Egypt's usual practice of buying wheat in smaller quantities for short-term deliveries has baffled traders, with some suggesting that the risk of escalating war in the Middle East and global economic turmoil may have influenced the GASC's decision.
"This is optimistic news at a time when demand is very weak," said a German trader. "The GASC will be able to buy a certain amount even with these payment terms. Wheat prices are low and both in Russia and France the quantity and quality of the harvest have been reduced.
Traders said sales of Russian wheat and other Black Sea wheat are likely to increase, although offers for the most distant periods may not be attractive for GASC.
According to a trader, Russian wheat with a protein content of 11,5% for delivery via the Black Sea in August/September was about $210 per tonne on Tuesday FOB value.
France's soft wheat crop is expected to shrink to its lowest level in 41 years, at 25,17 million tonnes, due to rains, Argus Media reported on Tuesday, in line with other market estimates.
In Germany, predominantly hot and sunny weather is expected this week, which should favour the start of the harvest after repeated delays due to rain.
Traders report quality losses in southern Germany, while the outlook in the northern export zones is better and a few days of favorable weather should enable farmers to complete the harvest.
EU soft wheat exports rose to 2,18 million tonnes this season, down 39% from last year, although French data are still incomplete.