Russian wheat prices steady after three-week long fall

Russian wheat export prices steadied last week after a three-week long fall that had been triggered by pressure from the promising new crop, analysts said on Monday.

Russian wheat with 12.5% protein loading from Black Sea ports was at $202 a tonne free on board (FOB) at the end of last week, up $1 from the week before, agriculture consultancy IKAR said in a note.

Sovecon, another Moscow consultancy, pegged wheat at $199 per tonne, down $1. Barley held steady at $182 a tonne.

Analysts have been raising their estimates for Russia’s 2020 wheat crop in recent weeks, with IKAR’s forecast rising 5.5 million tonnes in the past month, to 82 million tonnes. But this week they struck a more cautious note.

“We were the most optimistic Russia’s crop forecaster all 2020 but we now feel that the market has turned from too much pessimism to too much optimism,” Sovecon analysts said.

“Crops in Siberia, the largest spring wheat producer, are in the worst shape since 2012, as per our analysis,” Sovecon said. Sovecon’s wheat crop forecast stands at 81.2 million tonnes.

Russia has already exported 6 million tonnes of grain, including 4.8 million tonnes of wheat, since the start of the 2020/21 season on July 1, and the export pace is ramping up, Sovecon said, adding that “August shipments could be record ones, close to August 2019.”

Russia’s August grain exports are estimated at 5.5 million tonnes, up from 3.0 million tonnes in July, Sovecon said.

Other Russian data provided by Sovecon and IKAR:

 Product:            Price at the end       Change from week
                        of last week:                earlier
 - Domestic 3rd         12,300 rbls/t              unchanged
 class wheat,               ($165.19)  
 European part of                      
 Russia, excludes                      
 delivery                              
 (Sovecon)                             
 - Sunflower seeds      22,900 rbls/t            -1,475 rbls
 (Sovecon)                             
 - Domestic             57,325 rbls/t              unchanged
 sunflower oil                         
 (Sovecon)                             
 - export                      $790/t                   -$10
 sunflower oil                         
 (Sovecon)                             
 - Soybeans             28,300 rbls/t              -700 rbls
 (Sovecon)                             
 - white sugar,              $417.5/t                 +$23.5
 Russia's south                        
 (IKAR)                                
 
($1 = 74.4600 roubles)

Source: Reuters (Reporting by Olga Popova and Polina Ivanova; writing by Polina Ivanova; editing by Katya Golubkova)