Wheat prices set two-year highs in both Chicago and Paris on Wednesday, and a record in London, as talk of Algeria accelerating purchases heightened talk of stockpiling amongst major importers.
Chicago wheat for March touched $8.59 ?a bushel, the highest level for a spot contract since August 2008.
Paris wheat for the same month reached E267.25 a tonne in late deals, the best price for a near-term lot since March 2008, while London wheat added 1.2% higher to an all-time high of ?03.50 a tonne.
The rises came amid a rash of further news and speculation on orders from Middle Eastern and North African nations unsettled by unrest in countries such as Algeria, Egypt and Tunisia this month blamed in part on rising food prices.
Algeria, the world's fourth-ranked wheat importer, confirmed the purchase of 800,000 tonnes of wheat, bringing known purchases this month to 1.75m tonnes, excluding hefty purchases of durum, the variety used to make pasta.
Indeed, the country was reported to be enacting plans to accelerate grain purchases.
Traders are expecting news on an Iraqi tender, while "rumors this morning have Saudi Arabia looking purchase up to 500,000 tonnes of wheat", US Commodities said.
Tight supplies
While Egypt, the top importer, said it was not altering its purchasing strategy, and that it had enough wheat supplies for six months, that was "not necessarily how the market was trading it", Jonathan Lane, trading manager at UK merchant Gleadell, said.
"You wouldn't want to be in Egypt's position," he told Agrimoney.com.
Indeed, wheat supplies were harder to secure than might first appear from apparently robust global stocks estimates, with the grain fighting for port space with corn and soybeans in the US, and in Australia, thanks to the unusually eastern-weighted crop, being handled by facilities not fitted for such large volumes.
"At the moment, the only place you can buy and physically ship [milling] wheat out is France," the top European producer and exporter of the grain where waning stocks have already provoked concerns about the level of shipments.
UK exports, meanwhile, have been running at twice last season's levels, according to customs data.
Imports from Australia?
The drain on European Union supplies has prompted talk of the region's own buyers turning as far as Australia for replacement supplies before the harvest replenishes silos, with the European Commission yet to decide on a E12-a-tonne levy, and quota levels, on imports.
Jaime Nolan at FC Stone, flagging Spanish interest in Australian feed wheat, noted that the grain would cost some $305-310 a tonne to import, including freight.
Mr Lane noted that, with the backlog of Australian orders, it may take until April or May to discover the truth in speculation of purchases from the country.
