Wheat exports from Russia increased last week, according to the figures, and this went hand in hand with a limited price increase. For years, Gasc has been the designated organization for the import of grain by Egypt. President Sisi wants to change this by making the army responsible for the import. The Wasde report that will be published tonight Dutch time was also anticipated a little during the last trading session.
The December wheat contract on the Matif closed yesterday €3,50 higher at €220 per tonne. The March contract closed a quarter lower on the Paris exchange at €227,25 per tonne. On the CBoT, wheat closed 0,2% lower at $5.41¼ per bushel. Corn gained 0,8 higher at $4.34 per bushel. Soybeans fell 0,4% to $9.90 per bushel in the last trading session.
After a meagre export in the last week of November, Russian exporters have increased their pace in the first week of December, according to the latest figures from SovEcon. Last week, Russia exported 1,08 million tons of grain, of which 1,01 tons was wheat. A week earlier, this was 630.000 tons, of which 550.000 tons was wheat. With the increased demand, the price also takes a step. Ikar increased the quotation for Russian Black Sea wheat by $2 to $228 tons.
The fall of the Assad regime has not gone unnoticed by the Kremlin on several fronts. Bashar al-Assad has fled to Russia where he has been granted asylum. The head of the Russian Union of Grain Traders has other concerns. Syria is a buyer of grain from Russia and exporters would rather not lose the country as a customer. In addition, there are still some outstanding invoices from previous deliveries. Russia is therefore seeking cooperation with the rebels in Syria.
Grain purchases to the army
Another major buyer of Russian wheat is also in trouble. The Egyptian state purchasing agency Gasc is a household name and a trusted name in the grain trade. Gasc (in full General Authority for Supply Commodities) falls under the Egyptian Ministry of Supply. The service is best known for the tenders it regularly issues and for which foreign suppliers of wheat can bid. Egyptian President General Sisi wants to place the import of food under the Mostakbal Misr service, which falls under the Egyptian air force. This is said to be evident from a letter that Egypt sent to the Russian Ministry of Agriculture that was seen by the Reuters news agency. This action does not come as a complete surprise. Companies that are linked to the army are flourishing under Sisi. This has been causing unrest among some businessmen in Egypt and foreign investors for some time now. Coincidence or not, but yesterday several news services reported that Russia has started delivering 430.000 tons of wheat that Gasc bought with direct agreements.
Windfalls in South America
In the grain trade, people were also cautiously preparing yesterday for the December Wasde report, which will be released tonight Dutch time. No major changes are expected by the trade for the world end stocks of wheat and soy, according to the Reuters poll. Due to good demand for corn, the end stock of corn may be slightly smaller, according to the survey participants. For Argentina and Brazil, the trade expects a slightly larger soy harvest in the Wasde report. The average soy harvest for Argentina is estimated at 51,35 million tons and for Brazil at 169,3 million tons. In the November edition of the Wasde report, the USDA calculated 51 and 169 million tons respectively.