Russian wheat export prices steady last week, supplies high

Russian wheat export prices held steady last week, and supplies were plentiful, analysts said.

The price of 12.5%-protein Russian wheat scheduled for free-on-board (FOB) delivery in September was $246 per tonne last week, up from $245 a week earlier, the IKAR agriculture consultancy reported.

Sovecon sees the price for this class of wheat at $250-$254 per tonne FOB, about the same as the previous week.

Analysts continue to raise their forecasts for this year’s Russian wheat harvest: Russia-focused agricultural consultancy Sovecon raised its forecast to 92.1 million tonnes from 87.1 million tonnes after good yields in the centre of the country and the Volga region.

Sovecon analysts referred to the price floor set for Russian wheat, which they attributed to the high bid price at the latest GASC tender.

“This is another confirmation of the Russian AgMin’s attempts to establish a 12.5% wheat price floor of $270 FOB for tenders and $260 for non-tender deals. There are reports that the AgMin plans to increase this threshold by $5 during the next few months ($275 per tonne for October, $280 for November)”, – Sovecon said in its weekly note.

Sovecon estimates total Russian wheat exports in August at 5.1 million tonnes, compared with 3.5 million tonnes in August 2022 and an historic average of 4.7 million tonnes for the month of August.

Russia exported 1.24 million tonnes of grain last week compared to 1.26 million tonnes a week earlier, including 1.15 million tonnes of wheat compared with 1.19 million tonnes a week earlier, Sovecon wrote in its weekly note, citing port data.

“Outstanding wheat export sales on Friday increased by 0.2 metric tonnes to 5.9 metric tonnes, a new record high indicating that the exporters are somehow coping with the AgMin’s intervention attempts”, Sovecon said.
The wheat harvest as of Aug. 24 totalled 70.6 million tonnes (versus 77.7 million tonnes а year earlier) from 18.1 million hectares (versus 18.3 million hectares), with an average yield of 3.90 tonnes per hectare (4.25 tonnes per hectare).

This accounts for 61% of the total area.
Source: Reuters (Reporting by Olga Popova, Editing by Barbara Lewis)