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IKAR in Mass Media

Russian wheat prices stable on stronger rouble, Turkish demand

15 мая 2017 года

MOSCOW, May 15 (Reuters) - Russian wheat prices were broadly stable last week as the rouble rose against the dollar and Turkey restored purchases of Russia's upcoming new crop of wheat, balancing pressure from high stocks and good prospects for the upcoming crop, analysts said on Monday.

Turkey, traditionally the second-largest buyer of Russian wheat after Egypt, resumed wheat imports from Russia on May 8, just a few days after a trade dispute with Moscow was settled.

"Turkish buyers have started to show their interest in Russian grain last week after a long pause. The demand is primarily focused on wheat from the new crop," Russian agricultural consultancy SovEcon said.

Deal activity for the old crop is low as Turkey made large purchases of European wheat when deals with Russia were on hold, it added.

Black Sea prices for Russian wheat with 12.5 percent protein content were at $184.50 a tonne on a free-on-board (FOB) basis at the end of last week, unchanged from a week earlier, SovEcon said. The Russian rouble gained last week as oil prices rose.

IKAR, another Moscow-based consultancy, quoted FOB wheat prices in the Black Sea area at $183 per tonne, down $1 from a week earlier.

SovEcon pegged prices for the new crop for July-August delivery at $171 per tonne, unchanged from a week earlier, and IKAR - at $173, up $0.50.

According to IKAR, prices for barley from the old crop were at $159 per tonne and for the new crop at $154.

Russia exported 31.5 million tonnes of grain, including 24.4 million tonnes of wheat, between July 1 and May 10, the agriculture ministry said, up 1.1 percent year on year.

The U.S. Department of Agriculture expects Russia to export 28 million tonnes of wheat in the 2016/17 marketing year, which runs until June 30. SovEcon plans to update its forecast after May 20, its April estimate was at 27.1 million tonnes.

SovEcon also said that it had upgraded its forecast for Russia's 2017 grain crop to 115.3 million tonnes from 113 million due to updated data on the sowing area and yields. The wheat crop forecast was raised to 70.4 million tonnes from 69 million.

In the domestic market, high market stocks built up after a record crop in 2016, and the upcoming large crop in 2017, continue to add pressure on prices. However, many producers have put their sales on hold with the hope of seeing a turnaround in the market due to resumed Turkish purchases.

Domestic prices for third-class wheat were unchanged from a week earlier at 9,225 roubles ($163) a tonne in the European part of Russia on an ex-works basis, SovEcon said. Ex-works supply excludes delivery costs.

As of May 12, farmers had sown spring grains on 40.9 percent of the planned area, or on 12.7 million hectares, according to the agriculture ministry.

The grain sowing campaign is slower than a year ago but wheat sowing is running in line with the multi-year average. Cold weather in some regions in the first 10 days of May has not had any significant impact on condition of sowing and there is no major risk of damage, SovEcon said.

The sunflower market reacted to the resumption of Turkish purchases: sunflower seed prices rose by 500 roubles to 17,400 roubles per tonne, SovEcon said, while domestic sunflower oil prices added 500 roubles to 40,175 roubles and export oil prices jumped $15 to $710 per tonne.

Turkey is traditionally Russia's top sunflower oil buyer.

IKAR's white sugar price index for southern Russia rose $4.5 to $570.7 a tonne as of May 12.

($1 = 56.6130 roubles)

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

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