Prices for new-crop Russian wheat fell for the second week in a row as rains improved prospects for the harvest and the country's exports, SovEcon agriculture analysts said on Monday. Russia's 2013 grain harvest will rise 34 percent year-on-year, to 95 million tonnes, which will include 54.5 million tonnes of wheat, according to the Agriculture Ministry's forecast.
The ministry hopes that the increased harvest will allow the world's third-largest wheat exporter to replenish stocks after a drought last year and boost its exports. "The market may be too optimistic regarding supplies of Russia's wheat during the new season," SovEcon said in a note. The independent research organisation sees the 2013 wheat crop at between 50 million and 52 million tonnes.
Low carryover stocks and the government restocking programme are likely to limit the exportable surplus during the 2013/14 season which starts on July 1, SovEcon added. The Agriculture Ministry may buy up to 5 million tonnes of grain from the domestic market during 2013/14 to keep the country's exportable grain surplus in line with its own forecast of 18-20 million tonnes, it said last week.
Prices for new-crop milling wheat fell to a band of $250-258 per tonne on a free-on-board (FOB) basis in deep-water ports last week from $265-$270 per tonne a week earlier, SovEcon said in a note. Benchmark November milling wheat on the Paris futures market was down 0.5 percent at 202.75 euros ($270) a tonne by 1049 GMT on Monday. According to the Institute for Agricultural Market Studies (IKAR), prices for Russia's new-crop barley were quoted at $253 per tonne, down from $255-$257 per tonne. Demand for higher priced old-crop export grain was negligible, SovEcon said. It pegged maize (corn) prices flat at 8,200-8,400 roubles ($250-260) per tonne on a carriage paid-to (CPT) basis in shallow-water and in deep-water ports.
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