Russian wheat export prices were flat last week, shipments remain low

MOSCOW: Russian wheat export prices were unchanged last week, shipment volumes are still low and farmers are not in a hurry to sell at current low levels, analysts say.

The price of 12.5% protein Russian new crop wheat scheduled free-on-board (FOB) with delivery in late August was $219 per metric ton at the end of last week, just like the previous week, according to the IKAR consultancy.

Sovecon put the price of wheat with a protein content of 12.5% for the nearest delivery at $220-$222 per ton at the end of last week, slightly above $219-$222 per ton FOB a week before.

Large buyers stepped in last week: a large batch of Russian wheat - 720,000 tons - was purchased by Egypt’s GASC at $221 per ton FOB. Traders believe that Algeria also bought 70,000-750,000 tons of wheat from the Black Sea region.

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Prices in Russian ports remain low and farmers are in no hurry to sell, especially not in southern regions, Sovecon analysts wrote.

“Bid and offer spreads are wide. Buyers are lowering bids aggressively while farmers, looking at relatively low yields in the centre and Volga, are not rushing to sell.”

IKAR said on Friday that it had cut its forecast for the 2024 grain harvest to 128 million tons from 129.5 million tons and its grain export forecast for the season 2024/25 to 55 million tons from 55.5 million tons. The wheat crop forecast remained unchanged.

Today, the government of another region of the Russian Federation - Zabaikalye - announced the introduction of a state of emergency in four districts due to drought.

Russia started harvesting several weeks early due to weather conditions. As of July 12 Russian farmers had harvested 32.0 million tons of grain against 12.2 million tons a year earlier, from 8.4 million hectares, up from a previous 3.3 million hectares.

The average yield was 3.80 tons per hectare, up from 3.75 tons a hectare the year before.

The wheat harvest totalled 27.4 million tons, up from 7.3 million tons, from 7.0 million hectares, against 1.9 million hectares, with an average yield of 3.94 tons per hectare, versus 3.83 tons, Sovecon said.

Temperatures are predicted to be hotter than normal in the south, the southern Volga, and the southern centre this week; around normal or colder in the Volga Valley and the Urals; around normal or higher in Siberia. Rain in the Volga could be very beneficial for sunflower and corn, Sovecon noted.

Russia is the world’s largest wheat exporter. Its exports increased to 0.71 million tons of grain last week from 0.60 million the week before.

Shipments included 0.66 million tons of wheat, up from 0.51 million tons a week earlier, Sovecon wrote, citing port data.

Sovecon raised its wheat export forecast for July by 0.1 million tons compared to last week to 2.9 million tons, compared to a record 4.5 million tons a year ago.