Most Russian grain prices were on a constant plunge from the previous week on a growing harvest and a rampant assumption of bigger-than-expected volumes of hidden cereals, analysts said Monday (Mar 28).

 

Ample grain supply provoked talk that some of the grain was coming from hidden stocks. Market players speculated that some farms wrote off part of the crop as destroyed by the drought, to get compensation, while in fact they retained some grain.

 

The Russian Grain Union industry lobby estimated in February that some three million tonnes of grain may have been hidden.

 

In southern Russia, third-grade milling wheat declined to US$215 per tonne from US$216, fourth-grade to US$198 from US$204, feed wheat to US$188 from US$195, the Institute for Agricultural Market Studies (IKAR) said.

 

It said feed barley prices index remained unchanged at US$278 per tonne, while maize slightly strengthened to US$294 per tonne from US$291.

 

"We notice signs that the decline is slowing down, as, according to rumours, some companies started to buy thinking the prices are close to their bottom," IKAR said.

 

SovEcon agricultural analysts said in their note that feed wheat led the decline last week, having lost RUB275 (US$9.69) and reaching RUB5,925 (US$208.87) per tonne EXW in European Russia.

 

Milling wheat of both third and fourth grades declined by RUB250 (US$8.81) to RUB6,550 (US$230.9) and RUB6,150 (US$216.8) per tonne, accordingly, it said.

 

Average prices of other cereals declined less. But in the Volga region wheat prices declined by RUB300-400 (US$10.58-$14.10) per tonne, SovEcon said.

 

Prices may receive support from the government intervention sales, as the interest of buyers towards tenders is declining, while the government is slow at distributing feed grains, it said.

 

It added that last week major traders started naming bidding prices for grain at RUB5,100-5,600 (US$179.78-$197.41) per tonne CPT, but failed to find offers at these levels.