Russian wheat export prices were stable last week after increasing for 10 straight weeks due to easing concerns over the quality of this year's crop and as harvesting gathers pace. Black Sea prices for Russian wheat with 12.5 percent protein content and for August delivery were $196 a tonne on a free-on-board (FOB) basis at the end of last week, unchanged from a week earlier, IKAR agriculture consultancy said in a note.
SovEcon, another Moscow-based consultancy, said Russian wheat prices remained at $197-199. "It looks like Russian exporters are ready to sell grain more actively as they see the confirmation of the new high wheat crop," SovEcon said. Egypt, the world's largest wheat importer and the biggest buyer of Russian wheat, bought 420,000 tonnes, including 300,000 tonnes from Russia, at its latest state tender.
Prices for wheat with 11.5 percent protein content, however, continued to fall and were down $2 at $183 a tonne, IKAR added. SovEcon said barley prices rose $5.5 to $172.5 per tonne amid strong demand from customers including Saudi Arabia and a delayed crop in Ukraine. IKAR pegged them at $177.5 per tonne. As of July 26, Russia had exported 1.6 million tonnes of grain since the start of the 2017/18 marketing season on July 1, 4.3 percent less than a year ago. That included 791,000 tonnes of wheat, down 36.7 percent from the same period a year ago.
Domestic prices for third-class wheat fell 250 roubles to 9,175 roubles ($153) a tonne in the European part of Russia on an ex-works basis, according to SovEcon. Ex-works supply does not include delivery costs. Russia's grain harvesting has been delayed by rainy weather in several regions this year. "The delay of the pace of harvesting from a year ago continue to reduce," SovEcon said, adding that the quality of the grain crop was higher than a year ago.
The state centre of grain quality said as of July 19, the share of milling wheat in the total crop was 78.5 percent versus 71 percent around the same date a year ago. The share of the third-class wheat was 19 percent vs 22 percent, while the share of the fourth-class wheat was 59 percent vs 49 percent. The quality of the crop is better in the Krasnodar, Stavropol and Volgograd regions, but lower in the Rostov region, SovEcon said. "The start of the spring wheat harvesting, which usually has higher quality that winter wheat, is ahead."
SovEcon expects the quality of this year's crop to be higher than in 2016. It expects Russia to harvest 117 mullion tonnes of grain, including 72.9 million tonnes of wheat. It updates its forecast after 10th day of each month. IKAR currently expects a wheat crop of 72-75 million tonnes. Russian sunflower seed prices were up 75 roubles to 19,600 roubles per tonne, SovEcon said, while domestic sunflower oil prices were flat at 44,000 roubles and export oil prices were up $5 to $740 per tonne. IKAR's white sugar price index for southern Russia fell $79.7 to $622.79 a tonne last week.
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