Russian wheat export prices extended fall last week on low demand, analysts say

MOSCOW — Export prices of Russian

wheat continued to decline last week as low demand outweighed

the impact on the market of uncertainty over whether the Black

Sea grain deal will be extended, analysts said.

Prices for Russian wheat with 12.5% protein content,

delivered free on board (FOB) from Black Sea ports, were $265 a

tonne, down $6 from last week, the IKAR agriculture consultancy

said.

Russia exported 1.11 million tonnes of grains during the

week ended April 21, of which 1.0 million tonnes were wheat,

SovEcon said. That was compared with 1.16 million tonnes of

grain and 950,000 tonnes of wheat the previous week.

SovEcon downgraded wheat export estimates for April by 0.1

million tonnes to 4.2 million tonnes. Russia exported 2.4

million tonnes in April 2022, the average for the month being

2.7 million tonnes.

SovEcon noted growing problems with new export sales. Large

traders’ outstanding wheat export sales fell again, to 1.6

million tonnes from 1.9 million tonnes a week ago and 2.3

million tonnes two weeks earlier. This is the lowest volume

since November 2022.

Analysts attribute the drop to an unofficial price floor of

$275 per tonne FOB, which affects the competitiveness of Russian

wheat.

Last month, Reuters cited two sources as saying the

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government wanted exporters to ensure prices paid to farmers

were enough to cover average production costs, which would mean

keeping export prices for wheat at or above $275-$280.

The future of the Black Sea grain deal could be affected by

Turkish elections on May 14 or by a potential Ukrainian

counter-offensive, SovEcon said.

The deal allows Ukraine to export from its Black Sea ports,

but Russia has said it will not extend it beyond May 18 unless

barriers to its own food and fertilizer exports are addressed.

Overall weather conditions remain favorable for the new

crop, SovEcon analysts noted. They have raised their 2023 wheat

harvest forecast to 86.8 million tonnes from 85.3 million tonnes

previously.

However, IKAR reduced its wheat forecast to 84 million

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tonnes from 86 million, and the grain harvest to 129.5 million

tonnes from 131.5 million, mainly because of problems with the

state of crops in the northeast of the European part of Russia’s

Black Earth region, as well as in the Volga region.

Last week, the Russian Ministry of Agriculture updated its

2023 harvest forecast to 123 million tonnes of grain, including

78 million tonnes of wheat.

Other Russian data provided by Sovecon and IKAR:

Product: Most recent data: Change from week

earlier

– Domestic 3rd class 11,250 rbls/t -125 rbls/t

wheat, European part

of Russia, excludes

delivery (Sovecon)

– Sunflower seeds 22,575 rbls/t +650 rbls/t

(Sovecon)

– Domestic sunflower 74,350 rbls/t 0

oil (Sovecon)

– Domestic soybeans 30,650 rbls/t +175 rbls/t

(Sovecon)

– Export sunflower $870/t +$20/t

oil (IKAR)

– White sugar, $710.61/t +$10.32

Russia’s south

(IKAR)

(Editing by Barbara Lewis)