MOSCOW: Russian wheat export prices rose again last week as harvest expectations continued to deteriorate, analysts said, while also noting high volatility and reduced demand.

The price of 12.5% protein Russian wheat scheduled for free-on-board (FOB) delivery in late June was $248 per metric ton, ending the week up $1 amid low demand, according to the IKAR consultancy.

The Sovecon agriculture consultancy pegged the same class of wheat at $252-$255 a ton, up from $242-$246 a ton FOB.

“Traders noted a softening in demand as buyers anticipate lower prices,” Sovecon said in a weekly note.

Industry analysts continued last week to lower their forecasts for this year’s Russian harvest: Sovecon downgraded its wheat harvest forecast by 3.6 million tons to 82.1 million tons and Rusagrotrans by 5.7 million tons, under an optimistic scenario, to 84.2 million tons.

The weekly consensus forecast by the Rusgrain Union showed a 2.5% decline in the 2024 wheat crop to 84.6 million tons.

However, the Russian authorities have not changed their forecast yet, expecting a wheat harvest of 85 million tons and estimating the area of grain loss at about 850,000 hectares, in the expectation that Russia will be able to maintain the structure of sown areas after reseeding of dead crops.

At the same time, the Agriculture Ministry expects a federal emergency regime to be introduced as early as the end of this week after recent frosts that have killed or damaged crops. That would make it easier for farmers to receive insurance payments.

In some southern regions, the new crop harvest may start in a couple of weeks.

“The weather outlook is somewhat improving for winter wheat in Central Russia and parts of the Volga Valley but remains unfavourable for the South. The delay in spring wheat planting is becoming a bigger issue each week,” Sovecon noted.

In its forecast for June, Russia’s state weather forecaster Hydrometcentre predicted continued difficult agro-meteorological conditions in the south due to drought.