Higher Demand, Dry Weather Push Russian Wheat Prices Up

For the second week in a row, Russian wheat prices rose last week amid higher export demand and lower domestic supply caused by concerns about the 2020 crop in Russia and Ukraine, Agroinvestor reported.

Black Sea prices for Russian wheat with 12.5pc protein content and December delivery were up $1 to $208 per tonne on a free on board (FOB) basis at the end of last week, agricultural consultancy IKAR said in a note.

SovEcon, another Moscow-based agricultural consultancy, said wheat prices were up $1 to $209.5 per ton. Barley rose $1 to $188 per ton.

“There is a serious lack of moisture in both Russia and Ukraine, however sowings in the majority of regions receive enough precipitation for early development,” SovEcon said.

In general, the condition of sowings in Russia was close to average but in some cases slightly worse than a year ago, it said, adding that rains and snow were expected to arrive in Russia and Ukraine this week.

Temperatures in the European part of Russia are lower than usual for this time of the season but above the level that would threaten sowings.

Despite concerns, “farmers are not impressed with the current prices and still prefer to store wheat while some exporters start to run out of time” to source wheat for previously signed contracts,” SovEcon said.

Russia exported 19.4 million tons of grain, including 17 million tons of wheat, between the start of the 2019/20 season on July 1 and Nov. 21, SovEcon said. Total grain exports were down 16% from a year ago.

Amid rising demand from processors, domestic prices for third-class wheat in the European part of Russia rose 125 roubles to 11,350 roubles ($177.8) a ton by the end of last week, SovEcon said. That price was on an ex-works basis, which excludes delivery costs.