After the tender in Algeria, wheat futures in the USA fell by another 1.6-3.9%

Wheat quotations on world exchanges continue to fall, and after yesterday’s tender in Algeria, they fell another 1-3.9%, not reacting to data on increased purchases by the main importing countries.

In two sessions, wheat quotations in Kansas and Chicago fell by 4.4% and 6.3%, respectively, and on the European exchange – by 2.5%.

Yes, yesterday the May futures for wheat fell:

• by 3.9% to $195.1/t – for soft winter SRW wheat in Chicago,
• by 2.4% to $204.4/t – for hard winter HRW wheat in Kansas City,
• by 1.6% to $237.1/t – for hard spring HRS-wheat in Minneapolis,
• by 0.9% to €188.5/t or $205.5/t – wheat futures on Paris Euronext.

The Algerian State Food Procurement Agency (OAIS) purchased approximately 870,000 t of presumably Black Sea soft wheat for delivery on June 1-15 and 16-30 at a tender on March 6 at a price of $227.75-228/t C&F, while on previous At the auction, C&F contracted 900,000 tons of wheat at a price of $265.5/ton.

Another victory of Russian grain indicates the uncompetitiveness of European and American wheat in their traditional markets. Algeria usually bought wheat from the EU, especially from France, but in the last two years it has significantly increased its imports of Russian wheat. Therefore, European, in particular Polish, farmers need to thank their governments for the absence of sanctions on the supply of Russian agricultural products to world markets.

South Korea’s Major Feedmill Group (MFG) purchased 60,000 t of feed wheat for delivery in July at a price of $246/t C&F in private negotiations without a tender, although until recently the price was $250-260/t C&F.

So far, the market has not reacted to forecasts of a decrease in harvest in importing countries. Thus, in 2024, Morocco will harvest significantly less wheat than last year’s 4 million tons and the government’s planned 7.5 million tons, so it will be forced to increase imports. The country has been badly affected by the drought, and the water level in the reservoirs is only 23%.

In 2024, Indonesia may increase its wheat import by 5% compared to 2023, from 10.87 to 11.41 million tons, the association of flour millers of the country predicts. Increased demand for flour and animal feed is already forcing importers to step up supplies of low-quality wheat, as last year’s El Nino-induced drought sharply reduced feed production, especially corn.

We will remind that Indonesia is the world’s third largest importer of wheat, which it buys mainly from Australia, Canada, the USA and the Black Sea region.

Tags: Algeria, prices, wheat