Most Russian grain prices kept declining slowly last week with the sole exception of fourth-grade milling wheat, which is in high demand from exporters, traders said. Harvesting is close to last year's pace. As of July 11, the country's large and medium-sized farms had threshed grains on 2.03 million hectares, compared to 1.96 million a year ago.
Farmers had harvested 7.04 million tonnes of grain by bunker weight, 0.16 million tonnes less than at the same date last year.
Average yields declined by 0.2 tonnes to 3.47 tonnes per hectare. SovEcon believes that yields will remain lower than last year.
The activity on the milling wheat market, especially in fourth-grade cereal in high demand from exporters, has increased with the start of mass shipments of new-harvest winter wheat to the market.
Large buyers' purchase prices were largely unchanged from previous weeks, remaining in the region of 2,900-3,100 roubles per tonne ex-works and 3,100-3,300 roubles per tonne CPT (including delivery to ports of) Rostov-on-Don or Novorossiisk.
But producers are not in a hurry to sell grain at offered prices, as they believe rising demand will push prices further up. As a result, offer prices rose by 100-200 roubles per tonne.
Traders expect the competition between buyers to increase and purchase prices to strengthen in the coming weeks.
Currently, the market remains rather calm, but some traders say that prices may soar due to acute competition between buyers, in case they have to fulfil urgently some burning orders.
Starting purchase prices in the Volgograd region, where there currently is no supply of fourth-grade wheat, are in the region of 2,700-2,800 roubles per tonne ex-works. Feed wheat prices declined by an average of 125 roubles per tonne as the new harvest grain started pouring into the market.
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