European traders reported that Algeria's state grain agency OAIC bought around 1 million metric tonnes of milling wheat at an international auction which ended on Tuesday.

Initial reports indicated that purchases were made in a wide range of prices, including 253, $255 or $257 per metric ton, cost and freight included. They said that the majority of the purchases were made at $257 per ton, including freight.

Although the exact size of the order in terms of tonnage is still being debated, most traders estimate that it was initially over 1,000,000 tons.

It is not mandatory that the wheat be of Black Sea origin, but initial assessments suggested it could come from Ukraine, Russia, and Bulgaria. Traders said that some wheat could be sourced also from the Baltic Sea area.

The reports reflect the opinions of traders, and it is still possible to estimate prices and volume later.

The agency requested wheat for shipment from three main supply regions, including Europe, between September 16-30, and October 1-15, as well as October 16-31. It appears that the agency decided to skip the purchases in the first half September.

If the product is sourced from South America, Australia or New Zealand, it will arrive one month sooner.

Algeria is an important customer of wheat from the European Union and France in particular, but Russians and other Black Sea exporters are expanding rapidly on the Algerian market. Reporting by Michael Hogan, Hamburg; Gus Trompiz, Sybille De La Hamaide and Ros Russell in Paris.

(source: Reuters)