Russian milling wheat exports rise

Russian milling wheat exports rose to reflect a weaker US dollar last week, in contrast to a decline in domestic grain prices that followed the international market trend, analysts said on Monday. Analysts and traders expect Russian grain prices to decrease further as international market conditions are unfavourable for domestic producers struggling with rising expenses.
"We maintain a bearish outlook for the domestic market as there is still room for the international prices to fall," Moscow-based agricultural analyst group SovEcon said. "Logistical costs have increased and the rouble is rising." SovEcon said bid prices for fourth-grade (ordinary) wheat, including delivery (CPT) to Novorossiisk, declined last week to 4,600-4,700 roubles ($157.2-$160.6) per tonne from 4,700-4,800 roubles a week before.
Some traders expect prices to fall to 4,200-4,400 roubles per tonne, SovEcon said. Domestic prices for most cereals declined by an average of 50-100 roubles per tonne, while maize lost 200 roubles on rising supply to fall to 4,700 roubles per tonne, SovEcon said.
Only a weaker dollar pushed up the free-on-board (FOB) price of ordinary milling wheat. The Institute for Agricultural Market Studies (IKAR) said wheat with bug damage of up to 1 percent ended the week up $2-3 at $171 a tonne, FOB Novorossiisk.
IKAR said Russian grain exports from the start of the crop year in July to mid-March exceeded 15 million tonnes, including 12.8 million tonnes of wheat and 1.8 million tonnes of barley. Russia exported 15.695 million tonnes in the same period a year ago. IKAR said it expects March grain exports of no more than 2 million tonnes compared with record March 2009 exports of 2.16 million tonnes.
Russian grain exports are slowing from the record volumes of 2008/09. IKAR expects exports in the 2009/10 season to total 20 million tonnes, down from 23 million tonnes in 2008/09. Sunoil export prices fell $5 to $860 per tonne following a decline in international vegetable oils prices, IKAR said. The decline in domestic prices was less pronounced, SovEcon said - a 50-rouble drop to 26,275 roubles per tonne.
IKAR also forecast a shift from grains towards oilseeds in the crop rotation this spring: the area sown with sunseeds this season will be close to the record 6.3 million hectares a year ago, with the soybean area rising to 975,000 hectares winter and spring rapeseed area rising to 790,000 hectares.
White sugar prices ex-works fell to 23,600 roubles per tonne from 25,400 roubles a week earlier, and to $808 per tonne from $860 in Krasnodar, in line with international prices, IKAR said. IKAR forecasts the sugar beet area reaching 1 million hectares this year, close to record highs and up from 820,000 hectares a year ago, driven by high beet and sugar prices in the autumn.