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Strong rouble, warm and dry winter push Russian wheat to season high
* Russian wheat export prices hit new high for 2019/20 season
MOSCOW, Jan 13 (Reuters) - Export prices for Russian wheat reached this season's high last week due to growth in Chicago benchmarks, a stronger rouble, demand from Egypt and weather-related concerns about the 2020 Black Sea crop, analysts said.
Egypt's state buyer GASC bought 300,000 tonnes of wheat from Russia, Ukraine and Romania last week. The three countries compete for supplies from their Black Sea ports to Africa and Asia. Russia is the world's largest wheat exporter, while Egypt is its second-largest buyer after Turkey.
The price of Russian wheat with 12.5% protein content, loaded from Black Sea ports and intended for delivery in January, rose by $4 from the end of 2019 to $222 per tonne on a free-on-board (FOB) basis at the end of last week, consultancy SovEcon said. Barley remained at $185 per tonne. GRAIN/RU
IKAR, another agricultural consultancy in Moscow, pegged wheat at $220.5 per tonne, up $2.5. 0#IKAR
"Conditions for exporters remain extremely challenging," SovEcon said. "The rouble is strong, farmers are warming up after the GASC tender, (trade) margins are negative."
Russia exported 23.7 million tonnes of grain, including 20.6 million tonnes of wheat, between the start of the 2019/20 season on July 1 and Jan. 10, SovEcon said, citing customs data. Total grain exports were down 18% from a year earlier.
The data from ports for the same period, however, shows higher supply - 24.7 million tonnes of grain, including 21.2 million tonnes of wheat, SovEcon added. To see SovEcon's January export estimate: To see IKAR's new 2019/20 wheat export estimate:
The Russian winter remains unusually warm and dry for winter grain sowings as temperatures in the majority of wheat-producing regions are 3-12 Celsius (37.4-53.6 Fahrenheit) above norm, SovEcon said. Some regions had precipitation earlier in January, but the accumulated total level remains well below norm.
There is almost no snow cover in the North Caucasus region, while fields in the Volgograd and Central regions are covered by 2-5 mm of snow. The weather is expected to get colder soon, but still warmer than the norm, Sovecon said.
"Winterkill is obviously not an issue with current weather conditions but rising lack of moisture is," Sovecon said. Vegetation of wheat will start in the southern regions in the second half of February.
Russia's official New Year/Orthodox Christmas holiday on Jan. 1-8 kept the domestic market quiet. A lot of sellers return to work on Monday.
Other Russian data provided by SovEcon and IKAR:
Price at the end of last week:
Change from end of 2019
- Domestic 3rd class wheat, European part of Russia, excludes delivery (SovEcon)
11,675 rbls/t ($192)
- Sunflower seeds (SovEcon)
- Domestic sunflower oil (SovEcon)
- export sunflower oil (SovEcon)
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