Brighter Crop Prospects, Weak Demand Drive Russian Wheat Prices Down

(Business Recorder) – Russian wheat export prices fell last week with prospects for the upcoming 2019 crop improving while demand weakened, analysts said on Monday.

Black Sea prices for Russian wheat with 12.5 percent protein content for delivery in May were $221 per tonne on a free on board (FOB) basis at the end of last week, down $4 from a week earlier, Russian agricultural consultancy IKAR said.

SovEcon, another Moscow-based consultancy, said FOB wheat prices were down $3 to $224 a tonne. The group raised its forecast for Russia’s 2019 wheat crop last week by 3.4 million tonnes to 83.4 million tonnes.

Russia exported 38.2 million tonnes of grain between the start of the season on July 1 and April 18, down 9 percent from a year ago, SovEcon said. That included 32.0 million tonnes of wheat, down 3 percent from a year ago.

Domestic prices for third-class wheat fell 50 roubles to 12,150 roubles ($190.5) a tonne at the end of last week in the European part of Russia on an ex-works basis, SovEcon said. Ex-works supply does not include delivery costs.

By April 19, farmers had sown spring grains on 10.7 percent of the planned area, or 3.2 million hectares, compared with 1.9 million hectares a year ago, the agriculture ministry said. Russia’s spring grain sowing was delayed last year by a late spring.

Russia’s agriculture ministry continued to sell grain from its stockpile last week, offloading 7,500 tonnes of wheat. It has sold 1.76 million tonnes of grain, including 1.48 million tonnes of wheat since the start of this marketing year.

Sunflower seed prices were down 225 roubles to 18,650 roubles a tonne, while domestic sunflower oil prices dropped 325 roubles to 42,000 roubles a tonne, SovEcon said. Sunflower oil export prices rose $10 to $660 a tonne.

IKAR said its white sugar price index for southern Russia fell by $0.5 to $504.1 a tonne from a week earlier.