* Black Sea area wheat export supplies almost sold out
* West EU, U.S. wheat competitive against Russia
* EU and U.S. will still face other tough competition
By Michael Hogan
HAMBURG, Nov 28 U.S. and western European global
wheat export prospects are expected to pick up as rival supplies
from Russia and the Black Sea region run out quickly, with
exportable surpluses slashed by drought-damaged harvests,
But fresh business will still be fiercely contested by
Australian and Canadian wheat in the key Middle East market,
while niche producers Romania and Bulgaria are also likely to
sell their remaining supplies soon.
"We are likely to see the last gasp of sales from Russia and
Ukraine in the next few weeks and then more demand will be
switched to the west EU, especially France, and the United
States," a European trader said.
Wheat export powerhouses Russia and Ukraine both suffered
enormous crop damage this summer. Russia may import grains,
while Ukraine has voluntary export limits. Argentina, meanwhile,
has harvest problems related to flooding.
"If Egypt issues a purchase tender for second half January
shipment I would tip U.S. soft red winter to win a big part of
it," a trader said.
"This week started with November Russian wheat at $360 a
tonne fob, above French at $357 and U.S. Gulf soft red winter at
$344 a tonne," another trader said. "I would put my money on
more French and U.S. sales in coming tenders.
"But there are still cheap offers from the Black Sea at
around $350 a tonne fob, German wheat has become more expensive
at $373 a tonne."
Russian wheat was still offered heavily and won part of
Iraq's tender on Nov. 21.
"I think the Iraq buy was some of the final supplies being
sucked out of Russia and does not change the picture that Russia
is now spent as an export force," a trader said.
"But there are cheap offers from smaller producers Romania
and Bulgaria which may have to be sold before the west EU and
U.S. move in."
Traders noted aggressive offers of Canadian and Australian
wheat in recent purchase tenders.
"Both countries will give Europe and the U.S. a tough run in
the next round of grain tenders," a trader said.
The west EU's main export hopes rest on France and Germany.
The pace of French exports will depend on maize (corn) imports
covering animal feed demand and freeing up limited wheat supply
for export, traders and analysts said.
Traders see scope for France to export between 10 million
and 11 million tonnes of soft wheat outside the EU in 2012/13,
substantially higher than 8.4 million tonnes last season.
U.S. soft red winter wheat has become cheaper than French
wheat but the higher-quality hard red winter variety preferred
by some importers remained relatively expensive, even after the
euro's recent rise against the dollar, traders said.
Benchmark wheat prices in Paris are trading close to
their highest levels since 2008 and recent euro strength
made euro zone wheat more expensive in export markets.
"The rise in the euro is a penalising factor in itself but
this depends on the destinations and the quality," an export
"If you're talking about Algeria or Morocco, you have to
compare yourself with U.S. hard red winter wheat, which remains
expensive and against which French wheat is still competitive."
U.S. Gulf hard red wheat is around $363 a tonne fob.
A tender this week by Algeria has offered prospects of a
fresh French export sale, particularly as heavy
rain is troubling Argentina's harvest.
Another pull on French wheat supply could be rare demand
from Iran, which is rumoured to be looking at France after
already buying from Germany and the Baltic region.
Traders cited regular talk that at least one French wheat
cargo could be loaded for Iran by the end of December.
France is also expected to export more to Egypt, the world's
top wheat importer, this season after profiting from a tailing
off in offers of Black Sea wheat, although increasingly
competitive U.S. wheat is tipped to take a growing share.
(Additional reporting by Valerie Parent and Gus Trompiz;
editing by Veronica Brown and Keiron Henderson)