World wheat price rises on Russian concerns


RUSSIA has played a key role in sending world wheat futures higher over the past couple of weeks.

Last week saw hefty gains in the US and to lesser extent in Europe as the trade became concerned about the potential for Russia to cut its export program, potentially through the use of hyper-strict phytosanitary requirements at port.

Peter McMeekin, consultant with Grain Brokers Australia, said Egypt had just purchased 180,000 tonnes of Russian wheat at its latest GASC tender at a price $US8 higher than the previous tender in mid-September.

He said a rumoured Russian go-slow, based on supposed phytosanitary concerns, had caused concerns about delays at a number of key Russian grain export ports, but added over 650,000 tonnes of grain had been offered by Russian exporters over the December delivery window.

Commonwealth Bank commodity analyst Tobin Gorey said Russia was the major concern for the world wheat market.

“Russia has decided to inspect wheat exports more carefully,” he said.

“This stricter regime of checking has been put in place because of complaints from importers about fungus and weeds in cargoes.”

However, Mr Gorey said some had seized upon the news as a Russian push to slow exports.

“The more conspiratorially minded see this regime as a method to slow exports.”

He said talk of a Russian grain export tax refused to go away.

“We do think that Russia is likely to place a tax or other impediment on wheat exports, but we’re not sure that this tougher export inspection regime is related.”

Chicago Board of Trade (CBOT) December wheat futures are currently trading at US516 cents a bushel.

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