Russian wheat export prices little changed last week, volumes still high

Russian wheat export prices were practically unchanged last week amid weakening global markets, and supply volumes remain high for the time being.

The price of 12.5%-protein Russian wheat scheduled for free-on-board (FOB) delivery in late October was $235 per metric ton last week, the same as the week before, the IKAR agriculture consultancy reported.

“This price is rather nominal in nature. We do not see sales even at this level,” said IKAR head Dmitry Rylko.

The Sovecon agriculture consultancy sees the price for this class of wheat at $241-245 per ton FOB, down $2 on a week before.

Egypt’s GASC bought only 120.00 tons of Romanian wheat at last week’s tender at $256 FOB + $16 freight, while Russian offers “were extremely uncompetitive” at $270 FOB + $19 freight, writes SovEcon.

Analysts suggest that the informal limitation of the lower export sales price level for Russian wheat, which the Russian Ministry of Agriculture has never confirmed, may affect supply volumes, possibly as early as October.

Russia exported 1.23 million tons of grain last week compared to 1.28 million tons a week earlier, including 1.11 million tons of wheat, compared with 1.24 million tons a week earlier, Sovecon wrote in its weekly note, citing port data.

Sovecon raised its estimate of Russian wheat exports in September by 0.2 million tons to 5.1 million tons versus 4.2 million last year.

The wheat harvest as of Sept. 21 totalled 85.5 million tons (versus 99.6 million tons а year earlier) from 24.2 million hectares (versus 27.3 million hectares), with an average yield of 3.52 tons per hectare (3.65 tons per hectare).

Sowing of winter grains was carried out on an area of 9.5 million hectares, up from 8.4 million hectares a year earlier, Sovecon wrote.

The weather setup remains good for the harvest but threatens winter crops. The majority of winter wheat regions received 40-60% of normal precipitation in the last 30 days, Sovecon noted.
Source: Reuters (Reporting by Olga Popova Editing by Gareth Jones)