US FOB Gulf hard wheat export premiums slid on Monday as futures prices skyrocketed amid tight world wheat supplies, traders said. Soyabean export premiums also came under pressure from the higher futures prices, but corn and soft wheat basis offers held mostly steady.
Fears of further reductions in the drought-hit Australian wheat crop sent wheat futures at all three exchanges soaring to their daily trading limits of 30 cents a bushel. CBOT December wheat hit a contract high of $4.94, the highest spot price for CBOT wheat in 10 years. Kansas City December wheat closed at $5.31-3/4. The rally has made US wheat the most expensive in the world and has put the brakes on export sales, traders said.
US soft red winter wheat for nearby shipment costs about $203 per tonne FOB Gulf, while French wheat costs about $197, traders said. Cheaper supplies are also available from Canada, Germany and Argentina. "Everybody is going to go hand-to-mouth," said a wheat trader. "People can't believe these prices."
A few buyers issued tenders before the market opened on Monday, hoping to buy wheat before prices got any higher, traders said. Tunisia is seeking 100,000 tonnes of soft wheat for October/November shipment. Algeria is seeking 50,000 tonnes of soft wheat for an unspecified shipment period.
Soybean export premiums dropped 3-7 cents a bushel, pressured by recent rallies in futures prices. Despite the higher flat price, traders said that export demand remains strong due to limited supplies and higher prices in South America.
Top-buyer China was not in the market on Monday but traders said they expected to make sales later in the week. Corn export premiums held steady, supported by steady export demand. Traders expect most buyers to wait a few weeks before making any large purchases to see if the advancing Midwest harvest pressures prices.
"Everyone is being patient," said a corn trader.
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