February 16, 2010

Russian grain prices on downtrend, following global cues

Most Russian grain prices declined last week following the global market, analysts said on Monday (Feb 15).

FOB export prices for ordinary milling wheat with 1% or less bug damage declined slightly to US$173 per tonne, while other cereals prices lost US$1-US$2 per tonne, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

Exporters' bid prices at ports were rather stable, as traders were buying grain to implement contracts signed at the end of last year and at the beginning of 2010, SovEcon agricultural analysts said.

SovEcon said in its weekly note most traders bid for fourth-grade (ordinary) wheat at US$155.8-US$162.5 per tonne including delivery to (CPT) Novorossiisk.

SovEcon said domestic offer prices for fourth-grade milling wheat and fifth-grade feed wheat fell by some RUB100 (US$3.32) to RUB3,950 (US$131) per tonne and RUB3,125 (US$104) per tonne, respectively.

Corn prices were stable in spite of the state intervention sale tenders, average prices at which corresponded to market price of RUB5,049 (US$168) per tonne, it said.

SovEcon expects the negative trend on the domestic grain market to continue in line with the global market, where US wheat future have fallen by over 10% so far this quarter.

IKAR said Russian grain exports since the start of the 2009/10 crop year were 13.3 million tonnes, down from 13.6 million tonnes a year ago.

It said sunoil export prices were basically unchanged at US$860-US$865 per tonne, FOB Novorossiisk, while world vegetable oils export prices increased. Export activity was low. world;grain production.