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Bloomberg Business: U.S. wheat wins first Egypt government tender in two years

The world’s biggest buyer requested grain with a higher protein content, knocking France out of the mix.
18.05.17 | Interesting article at Bloomberg Business

U.S. wheat grabbed its first sale to the Egyptian government in more than two years as the world’s biggest buyer requested grain with a higher protein content, knocking France out of the mix.

Egypt’s General Authority for Supply Commodities bought two cargoes of U.S. wheat totaling 115,000 metric tons, of 39 percent of the amount purchased, according to two traders involved who asked not to be identified because they’re not authorized to speak to the media. Romanian grain was the cheapest, and Egypt also bought from top shipper Russia and Ukraine.

U.S. sales to Egypt’s state-run buyer had stalled since 2015 after record production elsewhere led to heavy price discounting. While Russian wheat has dominated Egyptian tenders this season, accounting for almost 70 percent of the grain purchased, U.S. supplies are becoming more competitive with current domestic prices about 18 percent cheaper than the previous sale.

“It will create a little more urgency for U.S. wheat supplies from buyers who have been waiting for lower prices,” Alan Brugler, president of Brugler Marketing & Management in Omaha, Nebraska, said in a telephone interview. “These sales may also cause Russia to cut prices despite the strength of the ruble to prevent a further build in stocks."

Benchmark wheat futures in Chicago rose Wednesday before the details of the latest tender were published, having dropped to a three-week low on Tuesday.