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Russian wheat export prices rise again, but demand softens

03 июня 2024 года

MOSCOW, June 3 (Reuters) - 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.

As of May 24, farmers had seeded 19.5 million hectares of grains compared to 23.9 million hectares in the same period in 2023. That included 7.7 million hectares of spring wheat, compared to 10.7 million last year, Sovecon wrote.

Russia is the world's largest wheat exporter. Its exports declined to 0.80 million tons of grain last week, from 1.07 million in the previous week. Exports included 0.72 million tons of wheat, down from 0.97 million tons a week earlier, Sovecon wrote, citing port data.

Sovecon increased its wheat export estimate for May by 0.1 million tons to a record 4.4 million tons, compared to 4.1 million tons in May 2023.

Other Russian data provided by Sovecon and IKAR:

Product:
Most recent data:
Change from a week earlier

- Domestic 3rd class wheat, European part of Russia, excludes delivery (Sovecon)
14,850 rbls/t
+925 rbls/t

- Sunflower seeds (Sovecon)
30,400 rbls/t
+1,425 rbls/t

- Domestic sunflower oil (Sovecon)
75,250 rbls/t
+900 rbls/t

- Domestic soybeans (Sovecon)
40,000 rbls/t
+1,100 rbls/t

- Export sunflower oil (IKAR)
$885/t
+$50

- White sugar, Russia's south (IKAR)
$696.07/t
+$9.09/t

Source: Reuters  |  #grain   |  Comments: 0   Views: 33

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