Russian wheat export prices decline

Russian export prices for benchmark wheat declined last week after Egypt bought US and Canadian supplies in a tender, while competition from neighbouring Kazakhstan added to the downward pressure on prices, analysts said on Monday. Russian wheat with 12.5 percent protein content weakened to $279 per tonne from $281 on a free-on-board basis (FOB) in the port of Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said.
SovEcon analysts wrote in a weekly market roundup that fourth-grade wheat purchase prices in Russian deep-water ports declined to 7,900 to 8,100 roubles ($270-$280) per tonne last week from 8,000 to 8,200 roubles per tonne on a carriage-paid-to (CPT) basis. IKAR said prices could weaken further, while SovEcon did not expect a surge in export demand for grain from southern Russia after shallow-water ports return to normal operations soon. "Elevators near ports are already full of grain. Many large traders are still processing Kazakh wheat supplies," SovEcon added.
Russian average domestic prices for third-grade milling wheat lost 50 roubles to reach 6,700 roubles per tonne ex-works in European Russia. Fourth-grade prices were at 6,675 roubles per tonne ex-works last week, down 25 roubles, SovEcon said. The Russian government sees no need for grain export restrictions during the current crop year, which saw Russia emerge from a near-total ban to export record volumes, Russia's first deputy prime minister, Viktor Zubkov, said on Monday.
Grain exporters should feel free to contract volumes for April, May and June, he added. But Egypt, the world's largest wheat importer, last week bought 120,000 tonnes of Canadian and US wheat for May 1-10 shipment on a FOB basis. Russian wheat was not offered.
US CBOT May wheat slipped 1.0 percent to $6.65-1/4 per bushel on Monday. The most active May contract in western Europe was at 212.50 euros ($280) a tonne, up 0.58 percent. European Union wheat exports will benefit little from rising world demand over the next five years as its shipments are curbed by growing use of cereals in biofuels, limited production gains and competition from Black Sea exporters, an analyst of Strategie Grains said last week.
It projects soft wheat exports from Black Sea producers Russia, Ukraine and Kazakhstan will reach a combined 37 million tonnes in 2016/17, up about 68 percent from an average 22 million per year over 2005-2010. For sunseeds, the domestic price index rose to $376 per tonne from $374 per tonne, IKAR said. SovEcon pegged it at 11,175 roubles ($380) per tonne, up 100 roubles.