Please consider Wheat Shippers Battle for Sales as Global Grain Glut Expands.
France may lose its place as the second-biggest wheat exporter after failing to win more than a dozen tenders in Egypt, the world’s biggest buyer, as shipments from Russia, Ukraine and Kazakhstan overwhelm markets.
Egypt favored cheaper supply from the Black Sea region in the past 17 tenders and cargoes to northern Africa from France’s Rouen, Europe’s biggest grain-export hub, fell to a four-month low in the week ended Nov. 2, port data show. France’s crop office expects a 23 percent drop in shipments in the 12 months ending in June, the most in at least a decade.
That’s reversing last season’s trend, when French cargoes jumped 16 percent to a record as Russia and Ukraine cut sales to ensure domestic supply. Prices that reached a three-year high in February are plunging after both countries eased restrictions. Output is also expanding elsewhere and the United Nations expects the biggest-ever global harvest. Wheat may drop another 20 percent in Paris by May, said Greg Grow, director of agribusiness at Archer Financial Services Inc. in Chicago.
“The world is awash with wheat and unless you can compete with the Black Sea you’re stuck,” said Tom Fritz, the Chicago- based co-founder of EFG Group LLC, a researcher and adviser to commodity traders. “The bias is for lower prices in an effort to clean up the glut.”