US & European wheat futures rallied to modest gains, but ended off session highs amid a lack of follow through interest. Planting will accelerate in Canada, and still there are no signs of lasting heat or dryness in Europe and Russia. However, Egypt’s tender results at midday confirmed just how competitive US Gulf wheat is in the world market, and also, surprisingly, how expensive old crop Russian wheat is through July. World cash wheat markets look to inch higher.
Egypt bought 295,000 MTs of optional origin wheat, of which 115,000 was sourced from the US. The average price paid ($193) generally follows the recent trend in futures. However, HRW was offered at $186-187; all other origins were offered at $197-205 – a sizeable spread. And the Russian offers were some $8-9/MT above where the market thought they’d be, and so now there are questions as to logistics and availability of Black Sea wheat between now and mid-July.
Overall, US wheat is very competitive (SRW & lower pro HRW are the world’s cheapest origins), and we find it difficult to be bearish below $4.20, basis July KC. Higher protein wheat, especially, is viewed as cheap.
