Russia has overtaken the United States as the top exporter of
the grain and now is the leading supplier of wheat to Egypt.
France is out of the running because heavy flooding has
damaged quality.
While it’s normal for countries near the Black Sea, including
Ukraine and Romania, to take the lead at the start of the season and French
sales to pick up later, Russia has a low-price advantage that is fueling the
surge in its market share.
Ontario has often sold wheat to Egypt, trying to get it out
of storage before the corn harvest begins.
The weak ruble, prime weather conditions and more investment
are accelerating a generation-long rebound of agriculture in Russia and
unseating American farmers who were the world’s biggest wheat sellers for more
than 50 years.
“With the harvest
delays in France, traders are not even willing to look at French wheat now,” Matt
Ammermann, a commodity risk manager at futures and options broker INTL FCStone
Inc. in Plymouth, Minnesota, is quoted by Bloomberg News. “Black Sea just has
so much to sell right now and the quality too is coming out better than
expected.”
Russia will export a record 25.5 million metric tons in the
season started in July, the most in the world for a second straight year, the
U.S. Department of Agriculture estimates.
Global output will rise to a record for a fourth straight
season, and stockpiles have never been bigger, USDA data show. Prices on the
Chicago Board of Trade, the global benchmark, fell this month to the lowest
since 2007.
Wheat for loading at Black Sea ports was $165 a metric ton as
of Friday, according to the Institute for Agricultural Market Studies in
Moscow. That’s almost $15 cheaper than French wheat with a minimum of 11
percent protein content for loading at the port of Rouen, based on
FranceAgriMer data.
In two tenders this month, Egypt agreed to buy 480,000 tons
of wheat with half coming from Russia, and Ukraine and Romania supplying the
rest. Last season, Russia also led sales for the first time in three years.
