Russian wheat rises for seventh week as global benchmarks gain

Export prices for Russian wheat rose for a seventh straight week last week due to higher benchmarks in Chicago and Paris, a stronger rouble and concerns about the 2020 Black Sea crop, analysts said. Russian wheat with 12.5% protein content loading from Black Sea ports and for January delivery rose by $2 to $218 per tonne on a free-on-board (FOB) basis at the end of last week, consultancy SovEcon said in a note on Monday. Barley fell by $1.50 to $185 per tonne.

IKAR, another agricultural consultancy in Moscow, pegged wheat steady at $218 per tonne. Moisture reserves in the soil remain low for Russian winter grain sowings after a dry December, and rains will be badly needed once the winter is over, SovEcon said. Russia is the world's largest wheat exporter. Temperatures in the Russian wheat growing regions remain at between 5 to 9 degrees Celsius (41 to 48 degrees Fahrenheit) warmer than usual, SovEcon said. This factor increases the risk of so-called winter kill for sowings in case cold weather arrives in coming weeks.

Temperatures are, however, expected to be only 2C to 5C above usual levels in next the two weeks, "so there is no threat at the moment," SovEcon added. Russian weather is drier than usual, while rains helped to ease situation in Ukraine last week, SovEcon said.

Russia harvested slightly less wheat in 2019 than expected, preliminary data showed last week. The Russian rouble is close to its strongest against the dollar since May 2018. Russia exported 23 million tonnes of grain, including 20 million tonnes of wheat, between the start of the 2019/20 season on July 1 and Dec. 26, SovEcon said, citing customs data. Total grain exports were down 18% from a year earlier.

Domestic prices for third class wheat in the European part of Russia remained at 11,650 roubles a tonne by the end of last week, SovEcon said. That price was on an ex-works basis, which excludes delivery costs. Sunflower seed prices rose by 125 roubles to 18,000 roubles a tonne, SovEcon said. Domestic prices for sunflower oil rose 500 roubles to 44,675 roubles a tonne, while export prices were steady at $760 per tonne. IKAR's price index for white sugar in southern Russia rose by $4 to $332 a tonne as of December 27. Russia's New Year holiday is on Jan. 1-8. The next Russian wheat weekly is expected on January 13.