European traders reported on Thursday that Algeria's state grain agency OAIC purchased approximately 600,000 metric tonnes of milling wheat at an international auction which ended on Wednesday.

The trader estimates for the purchase of Wednesday evening ranged between 500,000 and 600,000 tonnes. On Thursday, there were individual estimates of up to 580,000 tons, but the majority of traders put it at 600,000 tonnes.

On Thursday, traders confirmed that the total purchase price was $258.50 for each ton of freight and cost (c&f), the same estimate as on Wednesday.

Technically, the grain can come from any origin. However, traders suspected that most of the wheat was coming from the Black Sea Region. Origins expected included Romania, Bulgaria, and Ukraine.

Argentine wheat was also mentioned as a potential origin. However, November/December shipping could be too soon for Argentina's brand new crop, traders stated.

Wheat is shipped in two phases from the main regions of supply, including Europe: between December 1-15 and 16-31. The shipment date is one month earlier if the wheat comes from South America or Australia.

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

The traders said that wheat from France was once again excluded from the tender despite no official announcement.

Traders claim that diplomatic tensions sparked by Paris recognising Morocco as the sovereign power over Western Sahara have caused OAIC in recent months to exclude French wheat, and French companies, from its import tenders. OAIC says it treats all its suppliers equally.

A trader told me that French wheat was available at $258.50 a ton FOB. French, Russian and Ukrainian wheat all have the same price for December shipment, which is $226-$229 per ton FOB. (Reporting from Michael Hogan, Hamburg; Gus Trompiz, Paris; Editing Joe Bavier.)

(source: Reuters)