Russian wheat prices gain, on brisk export demand

31.01.2017

Russian wheat prices rose for the third straight week in a row, supported by robust export demand,  the continued firmness in the rouble, while emerging weather fears could support prices further.

Russian agricultural consultancy Ikar saw Black Sea prices for Russian wheat at $186 a tonne at the end of last week, up $1 a tonne week-on-week.

SovEcon saw Russian wheat prices also at $186 a tonne, up $2.5 a tonne from its estimate a week ago.

Strong export pace

Black Sea wheat prices are being supported by brisk exports.

"Loading pace remains buoyant at this start of year both in Russia and Ukraine," said Paris based consultancy Agritel.

"These countries have exported more than 800,000 tonnes of wheat on aggregate, including 535,000 tonnes from Russia and 285,000 tonnes from Ukraine," Agritel said.

"We can note that Russian exporters have shipped half of this volume toward the South east of Asia, especially to Indonesia, Sri Lanka, Bangladesh and Vietnam."

Egyptian buying

Last week Russian sellers scored big volumes in an Egyptian wheat tender after slightly lowering their tender.

Gasc, the Egyptian state grain buyer, bought 410,000 tonnes of Russian wheat, with prices ranging from $192-194.

Offers were on average about $2 a tonne lower than those of Russian sellers in the previous tender, when Gasc failed to buy any Russian cargoes.

Cold threat to wheat

Prices could get some more support, if cold weather damage appears this week.

"Temperatures were well below normal across eastern Ukraine and southwestern Russia over the weekend and even colder weather is expected over the next couple of days," said Kyle Tapley, at MDA Weather Services.

"Snow cover is sufficient to prevent winterkill in most spots, but remains a bit thin in southern Ukraine and portions of North Caucasus, where some spotty winterkill is possible."

"Temperatures should begin to moderate later this week, reducing winterkill threats," said Mr Tapley


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