Trading activity in the Russian old-crop wheat market continued slowing during past week, with market players switching to new-crop wheat, Vedomosti reported.
The current weather situation in Russia’s grain growing regions along with a lag in planting brings uncertainty to the market. Growers will most likely take a wait-and-see attitude in marketing new-crop wheat on the expectation of price growth in both short-and long-term, the report said.
Drought continues to be a problem, even though as precipitation of various intensities occurred in most of the country, but it was mostly ineffective and scattered. Soil drought deepens in the south of Russia, and this adversity is spread almost all over South Russia, including southern parts of the Volga federal district.
The above market events helped export prices for new-crop wheat. The current level of forward prices for Russian milling wheat is on average $22-24/MT FOB higher than at the same time last year.
“Before harvesting, warehouses of enterprises, located in major grain-growing regions, were still partially occupied with carry-over stocks of the 2016/17 season, which created additional difficulties for storing the new crop. Due to the lack of free storage capacities, farmers used to store grain in unsuitable warehouses, which in turn affected quality,” another report from UkrAgroConsult has said.
Russian wheat prices stay at three-year highs. The past year 2017 did not see such a substantial price drop as in the previous years, even despite a bumper wheat crop in Russia and enormous supply of the commodity in the global market.