RIYADH: Saudi Arabia’s state grains agency SAGO returned to the wheat market Thursday, as it sought to take advantage of a fall in futures prices by tendering for optional-origin milling wheat. The tender, for April-June shipment, comes after the first fall in futures prices on Wednesday. This came after a rally extending to five consecutive days in which wheat prices gained 11%, reaching a five-month high on fears that cold weather in North America has damaged the US wheat crop.
SAGO is tendering for 715,000 mt in 12 cargoes seven to Jeddah, four to Dammam, and one to Jizan – for April-June delivery, with bidding set to close Friday evening. At its previous wheat tender on December 4, SAGO bought 495,000 mt of wheat at an average price of $230.53/mt CFR. With French-origin 11% protein wheat at approximately $206/mt FOB, Baltic-origin 12.5% protein wheat at approximately $212/mt FOB, EU sellers look well-placed to take advantage of the timing of the tender. In a SAGO-issued report Tuesday, freight rates from Dunkerque were said to be $26/mt and $24.30/mt from Hamburg. Argentinian milling wheat is the most competitively-priced origin according to Agricensus’ assessments at $187/mt FOB Up River, although Saudi Arabia has not imported Argentinian wheat since March 2015.
