Russian wheat prices rise with global benchmarks
Export prices for Russian wheat rose last week for a second week with futures rising in Chicago and Paris, analysts said on Monday. Egypt’s state grains buyer GASC agreed to buy 240,000 tonnes of Russian wheat and 60,000 tonnes of French wheat in a tender on September 25. Egypt is usually the largest buyer of Russian wheat.
Black Sea prices for wheat with 12.5% protein content were up $1 at $188 per tonne on a free on board (FOB) basis by the end of the last week, agricultural consultancy SovEcon said in a note. Barley was up $2 to $179 a tonne.
IKAR, another agriculture consultancy in Moscow, pegged wheat prices for the nearest supply at $190 per tonne, up $4.
Russia has exported 12.8 million tonnes of grain since the start of the 2019/20 season, 10% less than during the same period of the previous year, SovEcon said. That figure included 11.1 million tonnes of wheat.
Brazil plans to introduce a 750,000-tonne tariff-free quota for wheat imports from countries outside of the South American Mercosur trade bloc in November, a government official said last week.
Russia has a chance to supply some of its wheat to Brazil as part of this quota, but its supplies are likely to be insignificant compared with Brazil’s total purchases, Interfax news agency quoted analysts at Russian rail operator Rusagrotrans as saying last week.
Also last week, Russia’s agriculture ministry raised its 2019 wheat crop forecast by 3 million tonnes to 78 million tonnes, but kept the total grain crop estimate unchanged.
The ministry has not publicly explained the reason for the upgrade.
SovEcon, which sees the 2019 wheat crop at 74.9 million tonnes, said that it saw no reason to upgrade the estimate at this time of season.
Prices for third-class wheat in European parts of Russia had risen 25 roubles to 10,325 roubles a tonne on the domestic market by the end of last week, SovEcon said. That price was on an ex-works basis, which excludes delivery costs.
“As late crops harvest rolls some farmers start to offer corn and sunflowers and halt sales of wheat,” SovEcon said.
Russian farmers have already sown winter grains for next year’s crop on 66% of the planned area, or 11.6 million hectares.
There were some rains in the European part of the country last week and they are expected to continue in coming weeks, SovEcon said. “Weather conditions for winter wheat are improving,” it added.
Sunflower seed prices fell sharply due to the arrival of the new crop, sliding 225 roubles to 18,975 roubles a tonne, while domestic sunflower oil prices fell by 450 roubles to 44,925 roubles a tonne, SovEcon added.