Gasc, the grain authority for Egypt, the world’s top wheat-importing country, has cancelled its last two wheat tenders after receiving no offers for the first, while the four cargos submitted to the second event were deemed overpriced.
While the world of course has ample supplies of wheat, confusion in the trade over Egypt’s policy over ergot contamination, and whether it really is zero tolerance (a difficult specification) undid the last two tenders.
Will this one fare better?
‘Context of confusion’
“Having received offers at elevated prices on their last tender, this afternoon’s Gasc tender should be interesting,” said Brian Henry at US broker Benson Quinn Commodities.
“We’ll see if they have squelched the concerns the trade has with their recent actions. Global wheat should be buyable at $180-ish a tonne.”
Agritel sounded a bit sceptical over Gasc’s chances, saying that the tender was occurring “still in a context of confusion about qualitative demand that could scare international operators”.
The Paris-based analysis group said: “Divergences are persisting between Gasc demands and the agricultural minister,” a reference to the reports that the ministry has been backing a zero tolerance option for ergot, while Gasc has preferred to stick with the 0.05% allowance more agreeable to merchants.
Agritel also noted that a cargo of French wheat which Egypt rejected two weeks ago on grounds of contamination with ergot (a fungus which can cause hallucinations if eaten in sufficient quantities) was “still waiting for unloading in Egypt”.
Soaring crude
Still, Gasc’s enthusiasm for tenders at least offers evidence of demand around for wheat, with the likes of Jordan and Morocco in the market too.
That helped wheat futures make another bright start in Chicago, gaining 0.4% to $4.60 a bushel for March delivery as of 09:30 UK time (03:40 Chicago time), although they did that in the last session only to close lower…
External markets are looking a bit more positive this time, with London shares up 1.6% in early deals, andBrent crude soaring 4.1% to $31.29 a barrel, amid talk that Opec members are nearing agreement to cut production.
Not that a deal is in the bag.
“The market has experienced similar posturing as prices reached decade lows only to come up empty,” Benson Quinn Commodities said.
Rare headway
Of course, oil prices are big influence too on values of corn, a major raw material for US bioethanol plants.
And corn futures, which have not achieved a positive session since February 2, made rare, if minimal, headway, adding 0.1% to $3.60 ½ a bushel.
OK, weekly US export sales data for the grain, as released on Thursday, were poorly received, at 405,000 tonnes – down 64% week on week.
But at least weakness in the dollar – down more than 3% this month as prospects have diminished of a rise in US interest rates – should help, in making US exports more competitive.
‘Expect rally to be sold’
Improved ideas for exports helped soybeans nudge higher too in early deals, by 0.2% to $8.75 ¼ a bushel for March delivery,
Indeed, Benson Quinn Commodities also flagged talk of buying of US supplies by China, the top importer of the oilseed (but which is actually this week celebrating lunar new year).
Whether the US can hold on to improved demand is a different matter, with CHS Hedging noting the return of another country from major holidays.
“With Brazil likely making good harvest progress, expect this rally to be sold once they return in full from Carnival,” which actually ended officially on Wednesday, but tends to linger in
Palm up
Still, soybeans received support from further strength insoyoil, which for March gained 0.6% to 31.79 cents a pound in Chicago, and earlier touched a two-month high of 31.83 cents a pound, in turn gaining strength from rival vegetable oil palm oil.
Palm oil touched 2,637 ringgit a tonne in Kuala Lumpur, the highest for a benchmark contract since April 2014, before easing back to 2,634 ringgit a tonne, a gain of 1.5% on the day.
Prices have gained extra vim from data earlier in the week showing an unexpectedly large drop in Malaysian production last month, amid fears of the impact on plantations of drought, caused by El Nino.
On Friday, Malaysia’s government also helped by confirming it was keeping at zero its export tax on crude pam oil exports – a level it has been at since May last year.
- See more at: http://ingredientnews.com/articles/corn-makes-rare-if-small-gains-as-oil-soars/#sthash.Gzr6jlqh.dpufWhile the world of course has ample supplies of wheat, confusion in the trade over Egypt’s policy over ergot contamination, and whether it really is zero tolerance (a difficult specification) undid the last two tenders.
Will this one fare better?
‘Context of confusion’
“Having received offers at elevated prices on their last tender, this afternoon’s Gasc tender should be interesting,” said Brian Henry at US broker Benson Quinn Commodities.
“We’ll see if they have squelched the concerns the trade has with their recent actions. Global wheat should be buyable at $180-ish a tonne.”
Agritel sounded a bit sceptical over Gasc’s chances, saying that the tender was occurring “still in a context of confusion about qualitative demand that could scare international operators”.
The Paris-based analysis group said: “Divergences are persisting between Gasc demands and the agricultural minister,” a reference to the reports that the ministry has been backing a zero tolerance option for ergot, while Gasc has preferred to stick with the 0.05% allowance more agreeable to merchants.
Agritel also noted that a cargo of French wheat which Egypt rejected two weeks ago on grounds of contamination with ergot (a fungus which can cause hallucinations if eaten in sufficient quantities) was “still waiting for unloading in Egypt”.
Soaring crude
Still, Gasc’s enthusiasm for tenders at least offers evidence of demand around for wheat, with the likes of Jordan and Morocco in the market too.
That helped wheat futures make another bright start in Chicago, gaining 0.4% to $4.60 a bushel for March delivery as of 09:30 UK time (03:40 Chicago time), although they did that in the last session only to close lower…
External markets are looking a bit more positive this time, with London shares up 1.6% in early deals, andBrent crude soaring 4.1% to $31.29 a barrel, amid talk that Opec members are nearing agreement to cut production.
Not that a deal is in the bag.
“The market has experienced similar posturing as prices reached decade lows only to come up empty,” Benson Quinn Commodities said.
Rare headway
Of course, oil prices are big influence too on values of corn, a major raw material for US bioethanol plants.
And corn futures, which have not achieved a positive session since February 2, made rare, if minimal, headway, adding 0.1% to $3.60 ½ a bushel.
OK, weekly US export sales data for the grain, as released on Thursday, were poorly received, at 405,000 tonnes – down 64% week on week.
But at least weakness in the dollar – down more than 3% this month as prospects have diminished of a rise in US interest rates – should help, in making US exports more competitive.
‘Expect rally to be sold’
Improved ideas for exports helped soybeans nudge higher too in early deals, by 0.2% to $8.75 ¼ a bushel for March delivery,
Indeed, Benson Quinn Commodities also flagged talk of buying of US supplies by China, the top importer of the oilseed (but which is actually this week celebrating lunar new year).
Whether the US can hold on to improved demand is a different matter, with CHS Hedging noting the return of another country from major holidays.
“With Brazil likely making good harvest progress, expect this rally to be sold once they return in full from Carnival,” which actually ended officially on Wednesday, but tends to linger in
Palm up
Still, soybeans received support from further strength insoyoil, which for March gained 0.6% to 31.79 cents a pound in Chicago, and earlier touched a two-month high of 31.83 cents a pound, in turn gaining strength from rival vegetable oil palm oil.
Palm oil touched 2,637 ringgit a tonne in Kuala Lumpur, the highest for a benchmark contract since April 2014, before easing back to 2,634 ringgit a tonne, a gain of 1.5% on the day.
Prices have gained extra vim from data earlier in the week showing an unexpectedly large drop in Malaysian production last month, amid fears of the impact on plantations of drought, caused by El Nino.
On Friday, Malaysia’s government also helped by confirming it was keeping at zero its export tax on crude pam oil exports – a level it has been at since May last year.
- See more at: http://ingredientnews.com/articles/corn-makes-rare-if-small-gains-as-oil-soars/#sthash.Gzr6jlqh.dpuf
