Russian wheat export prices rose sharply last week as global benchmarks rallied and concerns about the quality of wheat crops intensified in several regions of Russia, analysts said on Monday. Chicago wheat futures hit a new six-week high on Monday on concerns that dry weather in Europe and the Black Sea region will cut production in some of the world's main exporting countries.
Black Sea prices for Russian wheat with 12.5 percent protein content and for delivery in August were $211 per tonne on a free on board (FOB) basis at the end of last week, up $11.5 from a week earlier, Russian agricultural consultancy IKAR said in a note.
SovEcon, another agriculture consultancy in Moscow, said Black Sea FOB prices for wheat were at $207.5 a tonne, up $9.5, while barley prices jumped $13 to $203.5 per tonne. Prices were supported by expectations of poor crop quality in part of Russia's central regions, IKAR said. According to SovEcon, there is a limited offer of wheat with high protein content in Russia's southern regions, and demand from exporters for it has risen sharply.
As of July 18, Russia had exported 2.1 million tonnes of grain since the start of the 2018/19 season on July 1, up 90 percent year-on-year, including 1.4 million tonnes of wheat, the agriculture ministry said. The sharp growth in exports was caused by an early start to Russia's 2018 grain harvesting due to dry weather in several regions.
The world's largest wheat exporter has already harvested 32.1 million tonnes of grain from 19 percent of the area, up from 25.0 million tonnes on the same date a year ago. Wheat harvesting is 27 percent complete, and wheat yields are at around the three-year low, SovEcon said, adding that rainy weather, which hit some regions of the European part of Russia in recent days, may complicate harvesting.
Domestic prices for third-class wheat were up 100 roubles to 9,225 roubles ($146) a tonne in the European part of Russia on an ex-works basis, according to SovEcon. Sunflower seed prices rose by 525 roubles to 21,875 roubles a tonne, SovEcon said. Domestic sunflower oil prices rose 425 roubles to 46,175 roubles, while export oil prices were flat at $715.