Russian wheat prices were broadly stable last week though in the south recovered some of their losses later in the week on rumours about a possible restart to exports which could boost future prices, analysts said on Monday. Barley fell as the government continued offering the cereal from its intervention stocks, they said.
Grain prices last week started with some relaxation of grain prices and ended with some rises due to growing rumours about a possible export resumption, the Institute for Agricultural Market Studies (IKAR) said in a weekly note. But prices in the south failed to reach the levels of the previous week, and third-grade wheat declined to $194 per tonne from $198 in dollar terms, fourth-grade to $182 from $186, feed wheat to $177 from $181 as a result, IKAR said.
Average rouble-denominated EXW wheat prices were stable in the European part of Russia but they rose in the south, SovEcon agricultural analysts said in their note. Average third-grade wheat price rose by 25 roubles ($0.888) to 5,700 roubles per tonne, while fourth and fifth-grade wheat lost 25 roubles, declining to 5,525 roubles and 5,075 roubles per tonne, SovEcon said. "The probability that the wheat market may become stronger is high in our opinion," SovEcon said.
"The main drivers of this are stocks, which appear to be lower than many market players believe, and a possibility of export resumption in one form or another." "The following developments totally depend on the government position: if any sign encouraging exporters appears, domestic grain prices will follow an optimistic upside trend, and if there is no confirmation (of the exports restart), prices will continue to be stable or may even become lower," IKAR said.
Barley prices declined by 200 roubles to 5,950 per tonne as the government continued signing agreements with regions on barley supplies from its intervention stocks at a fixed price of 4,200 per tonne, SovEcon said. "Farmers have unlocked their remaining stocks of barley and maize, which led to a substantial price decline on the relevant markets," IKAR said.
Feed barley price declined to $232 per tonne from $246 and maize to $267 from $282, it said. "We observe intensive activities on the wheat flour export markets: during the first twenty days in May more than 50,000 tonnes of wheat flour were exported," IKAR said.
SovEcon said that in April Russia has set a record exporting 80,000 tonnes of flour. Exports since the start of the year to the end of April totalled 218,400 tonnes, it said. Sunseed prices declined to $602 per tonne from $630, crude sunoil price to $1,424 per tonne $1444, IKAR said. It said sugar prices rose to 26,700 roubles per tonne from 26,200 roubles and to $955 per tonne from $937 in Krasnodar.
The cost of refining white sugar from raws remains low and is estimated to be $875 per tonne. Sugar prices may decline due to rising supply but a lot will depend on international sugar prices, IKAR said.