Russian domestic wheat prices in the coming weeks will depend on the winter crop outlook, which if favourable, may allow more grain sales from state stocks and cool down the market, officials and analysts said on Monday. "The situation with the harvest forecast is unclear now, we need to wait for another two or three weeks to see if we can expect a good winter crop, and then decide whether to expand the interventions," Deputy Prime Minister Arkady Dvorkovich said.
"Otherwise, we can a face grain deficit during the spring, which we can not allow," Dvorkovich, who oversees Russia's farm sector, told a governmental meeting on Monday, according to RIA Novosti news agency. Last week, Russia's miller's union asked the government to ease conditions for importing wheat from Kazakhstan and rye from Germany this spring to cover a possible shortage after drought slashed grain crops.
Russia, historically the world's number three wheat exporter, was hit by hot and dry weather this year, which slashed its wheat harvest by a third and sent domestic wheat prices to record levels. Its exportable surplus has already been exhausted but some shipping continues.
The government plans to sell up to 1.25 million tonnes of grain from October 23 until the end of the year from its 5-million-tonne stocks. It has already sold 313,449 tonnes of wheat during the first six intervention tenders this marketing year, but has been unable to cool down prices in Russia's Central regions, which hit new highs last week. Russia's average domestic EXW (ex-silo) prices in the European part of the country for third-grade wheat rose 25 roubles to 10,000 roubles ($320) per tonne last week, which was a new record level in rouble terms.
Prices for fourth-grade milling wheat were 25 roubles up at 9,900 roubles per tonne, SovEcon said. Prices for fifth-grade feed wheat increased 50 roubles to 9,500 roubles per tonne this week. Domestic prices in Urals and Siberia region were stable, it added. Dry weather is causing concern for the state of winter grain crops in some parts of Russia's south, the country's main exporting region.
But rains could have improved the situation last week, the map of the state crop weather forecaster showed on Monday. As of November 7, 93 percent of the country's winter grain sowing campaign was completed, the National grain union said in a note. The purchase price of fourth-grade milling wheat in Russian deep-water ports was stable last week at 10,800 roubles per tonne on a carriage-paid-to (CPT) basis, SovEcon added in a note.
It pegged prices in shallow-water ports at 10,000 roubles per tonne. Benchmark January milling wheat on the Paris futures market traded down 2.0 euros or 0.72 percent at 275 euros ($350) a tonne by 0951 GMT. Prices for maize (corn) added 50 roubles to reach 9,000-9,200 roubles per tonne in deep-water ports. It was stable at 8,700-9,100 roubles per tonne in shallow-water ports, SovEcon added.
The Black Sea maize prices rose $5 to $300 per tonne, Russia's Institute for Agricultural Market Studies (IKAR) said in a note. For sunseeds, domestic prices in the North Caucasus region fell 200-500 roubles to 16,800-17,000 roubles per tonne, according to SovEcon. IKAR saw it at 17,680 roubles per tonne, down from 17,710 roubles per tonne.
It pegged domestic prices for crude sunoil at 36,850 roubles per tonne, down 150 roubles, while IKAR saw it at 36,000 roubles per tonne, down 360 roubles. Export prices were quoted at $1,140-1,150 per tonne on a free-on-board basis, SovEcon added. Soybean prices in Russia's South regions rose 200 roubles to 18,500 roubles per tonne, in dollar terms they added $4 to reach $587 per tonne.