Export prices for Russian ordinary wheat, the country's main exported cereal, rose last week after a victory at an Egyptian tender, while domestic wheat prices edged down on a stronger dollar, analysts said on Monday. Ordinary milling wheat, with up to 1 percent bug damage, was valued at $196 per tonne, FOB Novorossiisk, up $5 from a week before, the Institute for Agricultural Market Studies (IKAR) said in a weekly report.
The same cereal with higher bug damage is valued at about $185 per tonne, it added. Egypt bought 60,000 tonnes of Russian wheat at $196.5 per tonne last week, up $5.1 from the previous tender. The price dynamics was negative at the start of last week, SovEcon agricultural analysts said in a note.
But by the end of the week some large buyers raised prices to 4,800-5,000 roubles ($166.4-$173.3) per tonne CPT (including delivery to) Novorossiisk for ordinary wheat from some 4,700 at the week's start and 4,800-4,900 a week before, SovEcon said. IKAR noticed some unusual sales of wheat with protein content of 14.5 percent at $183 FOB and maize exports at $170 FOB from small Azov Sea ports.
It said after a certain strengthening of the dollar against the rouble, domestic grain prices lost $1-$2 per tonne, except for maize, which rose by $5 from a week before to $136 per tonne. SovEcon expects domestic prices to continue to decline slowly with possible price leaps in North Caucasus if exporters need grain to fulfil urgent contracts.
"If the grain markets keep lacking lustre and sunseeds markets keep rising, we may expect many producers to withhold grain and sell sunseeds instead," SovEcon said. "Also, risks remain high that international prices may go down if the futures market weakens substantially." Government intervention purchases reached 590,000 tonnes of milling wheat.
"As we had predicted, harsh competition caused sharp price shrinkage, so final intervention purchase prices declined to levels close to real market prices at each sale location," IKAR said. SovEcon said it expects the government to buy up to 2.3 million tonnes of grain this season at current prices. IKAR said drought on Argentine soybean fields continues to inspire bullish trends in the world oilseed markets.
Russian crude sunoil export price rose again to $860 per tonne from $820 in Novorossiisk following the international trend. Domestic sunseed purchase prices increased to $345 per tonne from $330. Soybean prices rose sharply to $452 per tonne from $418.