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.