US exporters were expected to raise the price of wheat they offered to sell Iraq following rallies this week that sent wheat futures to 11-year highs, said US grain traders.
Since Iraq's tender closed on May 30, the front-month contract for wheat futures at the Kansas City Board of Trade has soared about 70 cents a bushel on worries about the size of the US crop and tight global supplies.
US hard red winter wheat now costs about $250 to $255 per tonne FOB to a high-risk destination such as Iraq, the US traders said. At the end of May, Iraq was offered US and Canadian wheat at about $225 per tonne FOB, said grain trade sources in Jordan.
"No one is offering that price any more," said a US wheat trader. Iraq had offered to pay $205 per tonne FOB, the sources in Jordan said. The tender was for 50,000 tonnes but Iraq was expected to buy up to 200,000 tonnes. US traders expected Iraq to raise the price it is willing to pay. "They are pretty desperate for some wheat," said another US wheat trader.
In a tender that closed on May 2, Iraq bought 200,000 tonnes of US hard red winter wheat at $219 per tonne FOB and 50,000 tonnes of Canadian western red spring wheat at the same price, traders said.
Iraq is one of the world's largest importers of wheat, needing 3 million tonnes of wheat a year to feed its population of 27 million. The country has bought mainly US and Canadian wheat recently. Australia has been Iraq's main wheat supplier for years, but has done fewer sales since the US-led invasion and a scandal over kickbacks paid to the former regime of Saddam Hussein.
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