Russian wheat prices rise as exports hit record pace

Russian wheat export prices rose last week supported by strong demand from traders, who are exporting grains at a record pace, analysts said on Monday. Russia, one of the world's main wheat suppliers via the Black Sea, is set to harvest the largest wheat crop in six years thanks to favourable weather this year and has already harvested 39 million tonnes from 43 percent of the planned area.
Grain exports were on course to reach a record for a July of 3.0 million tonnes, up from the previous record of 2.5 million tonnes in July last year, Dmitry Rylko, the head of Russian agriculture consultancy IKAR said in a note. According to official data from the Agriculture Ministry, Russia exported 2.8 million tonnes of grains, including 2.4 million tonnes of wheat, 331,000 tonnes of barley and 46,000 tonnes of maize (corn) between July 1 and July 30. Grain exports for the period were up 17.5 percent, year-on-year, the ministry added.
IKAR upgraded its 2014 wheat crop forecast by 1 million tonnes to 58.5 million tonnes, it said in the note. This would be the largest since 2008 when Russia harvested 63 million tonnes of wheat. The consultancy has also raised its 2014 grain crop forecast by 3 million tonnes to 101 million tonnes, and expects 2014/15 wheat exports to come in at more than 22 million tonnes.
Russian prices for the new wheat crop with 12.5 percent protein content were up $4 to $246 per tonne at the end of last week, IKAR said. The quote was on a free-on-board (FOB) basis in the Black Sea compared with a week earlier. FOB prices for the same protein levels in the Azov Sea were flat at $217 per tonne.
According to the SovEcon agricultural consultancy, Russian FOB export prices for wheat with 12.5 percent protein content were up $1.5 to $247 per tonne in deep water ports. Grain stocks at farms and procurement and processing companies, excluding small farms, were down 13 percent from a year earlier to 11.1 million tonnes as of July 1, the ministry added, citing data from statistics service Rosstat. As for other crops, SovEcon agricultural consultancy said Russian export prices for sunflower oil edged down by $10 to $830-$840 per tonne on an FOB basis in the Black Sea. IKAR estimated its FOB Black Sea crude sunoil index at $785, up $5. IKAR added that its sugar price index in Russia's south was down $22.7 at 823.93 per tonne.