Russian wheat export prices likely to fall 7 percent

Russia's wheat export prices are expected to fall 7 percent from current levels when the new crop is delivered to the market this summer, IKAR, one of Moscow's leading agriculture consultancies, said on Monday. Russia, a major global wheat exporter, harvested a record crop of 119 million tonnes of grain in 2016 and prospects for this year's crop are bright so far thanks to favourable winter weather.
Prices for the new wheat crop with a 12.5 percent protein content and for July-August delivery are currently quoted by market participants at $175 per tonne on a free-on-board (FOB) basis in the Black Sea, IKAR head Dmitry Rylko said in a note. The spot prices for the old crop were at $188 per tonne at the end of last week, up $2 from a week earlier. Some farmers are holding on to their grain as the rouble has strengthened and also following a cut in the US Department of Agriculture's supply forecasts for the 2016/17 season, Rylko said.
SovEcon, another Moscow-based consultancy, quoted FOB wheat at $189.5 a tonne at the end of last week, up $1.5 from a week earlier, and maize (corn) prices at $177 per tonne, up $1. "Conditions for winter grain sowings remain satisfactory in general," SovEcon said. Another cold spell is expected in some regions this week but the snow cover is likely to be enough to keep the sowings safe, it said.
SovEcon has cut its 2017 grain crop forecast by 1 million tonnes to 113 million tonnes, including 69 million tonnes of wheat, it said, after it raised an estimate for the damage of area under winter grain sowings by 1 percentage point to 4 percent of the total area.
Russia exported 23.1 million tonnes of grain between July 1 and February 8, down 0.1 percent from a year ago, including 17.9 million tonnes of wheat, the agriculture ministry said. Domestic prices for third-class wheat, excluding delivery costs, fell 50 roubles to 10,600 roubles ($182) a tonne in the European part of Russia at the end of last week, according to SovEcon. Sunflower seed prices fell 75 roubles to 19,800 roubles a tonne, SovEcon said. Domestic sunflower oil prices fell 75 roubles to 45,500 roubles, while export prices were down $5 to $750 a tonne.