EU wheat exports get second wind with Chinese and U.S. demand
French wheat sales to China and talk of Polish or German wheat being booked in the United States are creating an unexpected wave of demand for EU supplies after exports had been curbed by Russian competition in recent weeks, traders said.
These opportunities could push 2022/23 European Union wheat shipments further ahead of last season’s pace and use up most of export surplus in France, they said.
After talk early last week that Chinese importers had purchased two cargoes of French wheat, traders have cited further deals that could bring the volume to several hundred thousand tonnes.
Five traders said seven to eight panamax vessels had been sold, or some 400,000 to 500,000 tonnes, while several traders said around 10 cargoes may have been booked, representing 600,000 to 700,000 tonnes.
“These Chinese sales appear to be large and are large enough to make a noticeable bite into the available French export supplies,” a European trader said.
The expectation that most of the volume is for shipment next month has fuelled a spike in December wheat futures on Euronext.
The Chinese demand may reflect the need to use up import quotas by end-2022, with immediate availability of Australian supplies curbed by rain that has slowed harvesting and raised doubts about wheat quality, traders said.
High domestic Chinese prices were also encouraging deals, traders added.
France is also seeing a fresh wave of sales to Morocco, with at least several vessels thought to be booked for the month ahead.
More unusually, sales of Polish, or possibly German, wheat to the United States have been talked of, linked to high internal U.S. wheat and transport prices and attractive ocean shipping rates.
Traders cited talk that about 100,000 tonnes of wheat from Poland was bought last week by U.S. millers for shipment to the U.S. East Coast at c&f prices at least $50 to $75 a tonne cheaper than U.S. hard red winter wheat, including port unloading.
“Today the talk is that Polish wheat can be shipped to Florida in a range between $360 and $370 a tonne c&f,” a Polish trader said.
Interest from U.S. buyers for EU wheat continued this week but it was unclear if deals were struck, traders added.
Source: Reuters (Reporting by Michael Hogan in Hamburg, Gus Trompiz in Paris, Julie Ingwersen and Karl Plume in Chicago; editing by Jonathan Oatis)