Russian 2017/18 wheat exports forecast revised higher: USDA WASDE

16.01.2018

Russian wheat exports for the 2017/18 year were revised 1.5 million mt higher to 35 million mt in the USDA WASDE January report, with weather conditions being favorable to port loadings in January.

Russia's record harvest, also revised up -- by 2 million mt to 85 million mt -- has supported competitive pricing for its wheat, giving farmers greater selling leverage in the global market.

As of January 10, Russian exports since July 1 were 34.1% higher year on year at 21.84 million mt, official data showed Monday.

"Russia's wheat is the cheapest [in the world] and good weather is expected for January too. Logistics are still troublesome but work much better compared with last year," a source said.

Nonetheless, prices have been gradually ticking upwards. There was plenty of length but margins were getting tighter.

"Forex is making exporting more difficult," a source said, speaking of higher replacement costs due to a weaker dollar.

Another source said, "Buyers are reluctant at the moment due to good coverage but also the uncertainty in weather. There could be a frost, water levels are decreasing, and the firm ruble. If we do see more activity, it will probably be towards the end of January."

After a flat market structure leading up to the new year, a contango structure has begun to form. Offers for deep sea Russian 12.5% protein wheat on an FOB basis for February loading were heard at $194/mt Monday, compared with $195/mt for March.

Bids were heard at $192/mt for February and $193/mt for March.


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