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Russian Exporters Switch to Corn as Wheat Supplies Run Out

21 ноября 2012 года

Nov. 21 (Bloomberg) -- Russian traders are selling more corn as exportable wheat supplies in the world's third-biggest shipper last season dwindle and domestic buyers offer higher prices than in international markets.

Corn accounted for 17 percent of Russia's grain shipments in the first 14 days of November from 11.5 percent in the first 10 days of October and 5.4 percent in all of September, data from Russia's Agriculture Ministry show. Still, wheat accounted for 66 percent of shipments, and barley for 15 percent in the first two weeks, it showed.

"Wheat exports from Russia are significantly slowing down and many traders have switched to selling corn instead," said Swithun Still, director of grain trader Solaris Commodities SA in Lausanne, Switzerland. "There is very little exportable wheat remaining, particularly in southern Russia close to the ports."

Russian wheat has lost its edge in international tenders as rising domestic prices made overseas deliveries less competitive. Egypt, the top wheat buyer, mostly bought French wheat in tenders in the past two months. Wheat futures have rallied 32 percent in Chicago this year and corn is up 16 percent after droughts from the U.S. to Russia killed crops.

Grain exports reached 11 million metric tons since July, down from 13.2 million tons in the same period last year, Deputy Agriculture Minister Ilya Shestakov said today. They may pick up from March after slowing in the coming months, he said, raising the grain-exports forecast to 15.5 million tons.

Barley Shipments

Russian wheat exports will drop 54 percent to 10 million tons in the 12 months ending June 30, while barley shipments will shrink 52 percent, the U.S. Department of Agriculture estimates. Corn exports will only decline 11 percent to 1.8 million tons, the USDA data show.

The port of Novorossiysk, Russia's main export hub, will handle 536,000 tons of wheat and 55,000 tons of corn in November, compared with 590,000 tons of wheat and 10,600 tons of corn the month before, Moscow-based agriculture researcher SovEcon said Nov. 6. Wheat shipments from the ports on the Don River and the Azov Sea are dwindling and will slow further when ice sets in shortly, Still said. Russian grain exports will decline to 1 million tons in December before falling to 300,000 to 500,000 tons from January onwards, he estimated.

Surging domestic wheat prices wiped out exporters' profits by mid-November and traders are shipping more corn mostly to Spain, Israel and Turkey, as well as increasing exports of peas, mustard seeds, oilseeds and barley, said Arkady Zlochevsky, president of the country's Grain Union.

Exports continue despite selling prices being below domestic levels, said Dmitry Rylko, director of Moscow-based researcher IKAR. Traders who are still exporting wheat are selling stockpiles purchased earlier in the season at lower prices, thus making a profit, said Vitaly Bobnev, commercial director of grain trader Valars Group's OOO Valary unit.

Egyptian Purchases

Egypt is likely to resume purchases of U.S. wheat in its next tender, according to Sadri Mathari, chief commercial officer with Venus International. Supplies from Russia and eastern Europe dominated imports until September. The North African country bought 60,000 tons of Russian wheat from Glencore International Plc on Oct. 31 along with supplies from France and Romania.

Fourth-grade milling wheat, the main export variety, cost $355 a ton free-on-board in Novorossiysk, more expensive than the grain from France or Argentina, data from Russia's Agriculture Ministry show.

Wheat for January delivery fell 0.2 percent to 269.75 euros ($345.80) a ton on NYSE Liffe in Paris by 4:28 p.m. local time, up 38 percent this year. Wheat for March delivery gained 0.4 percent to $8.64 a bushel on the Chicago Board of Trade.

Corn for March delivery gained 0.1 percent to $7.4825 a bushel in Chicago.

Corn Exports

Russian corn exports may exceed 1.9 million tons unless restrictions on overseas sales are implemented, said Vladimir Petrichenko, director of Moscow-based consultancy OOO ProZerno. Still, the pace of corn exports may slow in the same way wheat deliveries did, according to Still.

"Corn exports are quite active at the moment, but they too will diminish as Russian feed compounders and starch producers are starting to offer higher prices than export prices," he said.

Source: Bloomberg  |  #grain   |  Comments: 0   Views: 89

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