US based Ardent Mills buys European wheat amid supply concerns

Supply issues and high inland logistics costs have pushed the US-based flour miller Ardent Mills to turn to Europe for wheat, with up to seven cargoes of Polish and German wheat sold for deliveries in 2023, trade sources told Agricensus Monday.

Trading giant Viterra sold some volumes of Polish wheat for May shipment, while at least two vessels of German wheat were also heard to have been purchased, but the seller’s name was not available at the time of publication, sources reported.

“It is cheaper to ship to the East Coast [from Europe] rather than bring it from Kansas,” a Europe-based trader said.

“European wheat is $100/mt cheaper; not a big deal as last week it was $130/mt, but still we can sell to any USA consumer,” another source said, referring to the price difference, as Polish 12.5% wheat was heard offered at a €9/mt premium to the September Euronext wheat futures, equating to around $250.50/mt FOB Poland for spot loading.

Trade sources estimated freight for a handy-size vessel at around $20-30/mt to ship from northern Europe to Tampa, Florida, one of the Ardent Mills locations.

On the other side, hard red winter (HRW) wheat is priced at around $359/mt FOB US Gulf, with additional railway transportation cost assessed at around $20/mt, making it uncompetitive compared to European origins.

Another Ardent Mill located in Albany, New York was also said to have covered their wheat needs till the end of 2023 by shipments from Europe.

According to the Agricensus Export Dashboard, 32,700 mt of Polish wheat sailed for the US in January 2023, while no other shipments were reported in the last ten years.

Trade sources expect European wheat shipment to the US East Coast to increase as Kansas is facing the worst wheat crop since 1957 amid a severe drought and is projected to harvest just 4.84 million mt in 2023.