Spain buys 85,000 tonnes of US wheat

Spain has bought at least 85,000 tonnes of US wheat to use in animal feed, traders said on Thursday, although additional cargoes are in doubt because European and Black Sea origins can now compete after a cold snap. A European trader said 55,000 tonnes of wheat chartered by Bunge was lined up in a US port and bound for Spain.
That added to 30,000 tonnes of US soft red winter wheat reported on Wednesday to have been sold by Louis Dreyfus for about $286 per tonne, cost and freight. Officials at Louis Dreyfus and Bunge were not immediately available for contact. Spanish dealers prefer to buy feed wheat from Bulgaria and Romania, on which no duty is payable because they are fellow members of the 27-country European Union. They also like to buy from Black Sea neighbours Russia and Ukraine when the EU allows special imports under the so-called "tariff-rate quota" (TRQ) scheme.
Brussels has awarded TRQ licences to import about 1.2 million tonnes of low- and medium-quality wheat in the first quarter from countries other than the United States and Canada. However, as severely cold weather hit the Black Sea earlier this month dealers reported delays in shipping and said up to 200,000 tonnes of US wheat had been sold to Spain.
According to traders, dealers had asked the EU to allow them to declare force majeure on TRQ licences so they could switch to US origins without incurring penalties. A source at the EU's executive, the European Commission, noted dealers had until March 31 to use the TRQ import licences.
"If Ukrainian ports remain frozen, there's an argument that it's force majeure, but it's too early to tell," the source said. So far, the Commission has granted licences to import 66,000 tonnes of US feed quality wheat for this quarter. "US wheat looked competitive but the volume into Spain from the US may now be reduced to around 66,000 tonnes as EU prices have fallen and so present a better alternative." Feed wheat has been heard changing hands at 219 euros ($289.99) a tonne for prompt delivery in Spain's leading grains port, Tarragona, although dealers say prices can vary considerably due to recent volatility in the common currency's exchange rate.