Russian wheat export prices continue to fall amid growing supply
Export prices for Russian wheat fell again last week after a deal allowing the safe Black Sea export of Ukrainian grain was renewed, which supported the downward trend in world markets, alongside increased export volumes, analysts said.
Prices for Russian wheat with 12.5% protein content, delivered free on board (FOB) from Black Sea ports, fell $5 to $272 a tonne last week, the IKAR agriculture consultancy said. “We are neutral/bearish on wheat short-term. The biggest bullish news that Russia could halt shipment is not likely to materialise. Russian FOB could go lower but the downside looks limited,” the SovEcon agricultural consultancy wrote in its weekly note.
The Vedomosti business daily reported on Friday, citing two unidentified sources, that Russia could recommend a temporary halt in wheat and sunflower exports after a sharp drop in global prices in recent weeks.
“This story looks like an attempt to support the market which worked well in the short-term but doesn’t look like a game-changer for the wheat market as the probability of any export disruptions remains low (not 0 of course),” – SovEcon said.
Russia exported 1.16 million tonnes of grain during the week to March 24 – 970,000 tonnes of which was wheat, SovEcon said. That was up from 870,000 tonnes of grain and 750,000 tonnes of wheat a week earlier.
SovEcon estimates Russia’s wheat exports in March could reach 4.3 million tonnes, up from 2.1 million tonnes a year earlier and the highest level for March since 2018.
The current weather prognosis is friendly for winter crops, SovEcon noted.
Russia’s agriculture minister said last week that 93% of Russia’s winter crops were in a good or satisfactory condition, down from 95% reported in February.