Russian grain prices stable ahead of new crop

Average Russian grain prices were stable last week on lower demand as many traders were preparing to buy new crop grain, according to analysts.

New harvest ordinary milling wheat with 11.5% protein content and bug damage of up to 2% was priced at close to US$166 per tonne FOB Black Sea, which is likely to become the start up price of the cereal in the new season, the Institute for Agricultural Market Studies (IKAR) said.

SovEcon agricultural analysts said new crop fourth-grade (ordinary) wheat prices CPT (including delivery to) Novorossiisk were cited at RUB4,500-4,700 (US$146-US$153) per tonne.

Most major traders have stopped purchases at ports, SovEcon said. Those who remained active, kept prices for fourth-grade (ordinary) wheat at RUB5,000-5,150 (US$162-US$167) per tonne CPT Novorossiisk and RUB4,200-4,400 (US$136-US$143) including delivery to shallow water ports.

Processors have also reduced purchasing activity, which may indicate that some of them have replenished their stocks and are waiting for the new crop grain, SovEcon said.

By the middle of June, Russian grain export amounted to 20.5 million tonnes, down from 21.6 million tonnes a year ago, IKAR said. The exports included 17.35 million tonnes of wheat, down from 17.30 a year ago and 2.65 million tonnes of barley, down from 3.0 million tonnes, it said.

Exports in the first half of June were around 650,000 tonnes and IKAR expected them to reach 1.30 million tonnes in the whole of the month compared to 1.45 million in June 2009.

This means total grain exports may reach 21.10 million tonnes in the 2009/10 crop year, down from 22.37 million in the previous season, IKAR said.