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IKAR in Mass Media

Russia milling grains halt decline, feed grain falls

19 августа 2008 года

    MOSCOW, Aug 11 (Reuters) - Russian milling wheat prices have firmed in the last week, while feed grains extended losses as expectations of a record-high harvest are balanced by reports of poor wheat quality in some regions, sector analysts said.

    Exporters, betting that new-crop wheat prices are nearing lows, have stepped up purchases. The start and quantity of state intervention purchases will be crucial to the future direction of prices, analyst group SovEcon said.

   Russia has said it plans to buy 2-3 million tonnes of grain in the current 2008/09 crop year to support domestic prices and to sell grain later in the season. About $1.3 billion has been set aside and purchases are expected to start shortly.

   "Officials are so far talking about the second half of August," SovEcon said. "So far only milling wheat and rye are included on the list, but officials have said they may purchase feed grains.

   "If this happens, it could substantially alter the current relationship between milling and feed grain prices," it said.

   Third-grade milling wheat prices rose to 5,800-5,900 roubles ($246-250) per tonne over the last week from 5,500 roubles, basis ex-silo southern Russia, the Institute for Agricultural Market Studies (IKAR) said.

   Fourth-grade wheat rose to 5,400 roubles from 5,100 roubles in the same period, IKAR said.

   SovEcon said all prices had fallen in the last week, although the drop in third- and fourth-grade milling wheat -- 75 roubles and 50 roubles respectively -- was much lower than the 200 rouble decline in feed wheat and 550 roubles on feed barley.

   IKAR said fifth-grade feed wheat had fallen in price to 4,000 roubles per tonne from 4,420 roubles.

   IKAR said the combination of a record-high harvest and low wheat quality, raising the prospect of more feed grains coming to market, were behind the simultaneous increase in milling wheat and decline in feed wheat prices.

   SovEcon said that, while exporters were raising purchases, it was "still too early to say that the declining trend on the grain market has been exhausted".

   OILSEEDS DOWN

   Russian oilseed crushers have cut their raw sunflower oil prices by an average 3,000 roubles per tonne in the European part of Russia in the last week. Further declines are expected, but are unlikely to be as steep, SovEcon said.    SovEcon forecasts the sunflower oil price declining to 31,000-34,000 roubles per tonne before the new sunseed harvest from 38,000-39,000 roubles currently.

   "Against the background of the approaching sunseed harvest, the domestic winter rapeseed market is characterised by a descending trend to 11,000-12,500 roubles per tonne," IKAR said.

   "Domestic new-crop crude rapeseed oil is offered at about 31,000-32,000 roubles per tonne, while domestic old-crop crude sunoil prices have declined to 39,000-39,500 roubles per tonne," it said.

   Benchmark domestic white sugar prices in the southern city of Krasnodar have declined to 16.30 roubles per kg from 16.80 in the last week, IKAR said, citing weak seasonal demand.

Source: Reuters  |  #grain   |  Comments: 0   Views: 49

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