Russian grain prices drop ahead of new crop harvest

Russian grain prices fell last week from a week earlier, especially in regions where harvesting had begun, although drought fears pushed up prices in some areas, analysts said on Monday (June 28).

 

New crop wheat with 11.5% protein content and bug damage of up to 1% lost US$1, declining to around US$165 per tonne FOB Novorossiisk, the Institute for Agricultural Market Studies (IKAR) said in a weekly note.

 

SovEcon agricultural analysts said that most big traders were not buying wheat last week. The rest kept offering to buy fourth-grade (ordinary) wheat at RUB5,000-5,150 (US$160.9-165.7), per tonne including delivery (CPT) Novorossiisk.

 

Prices in shallow water ports became slightly weaker at RUB4,200-4,300 (US$135.1-138.4), compared to RUB4,200-4,400 (US$135.1-141.6) per tonne a week before, it said.

 

Old crop grain prices in North Caucasus, where the harvesting campaign had already started declined by RUB100-200 (US$3.22-6.44) per tonne on the average, while in the regions along the Volga river fears of drought pushed prices up by RUB50-100 (US$1.61-3.22), SovEcon said.

 

It said traders set new crop third-grade wheat EXW prices at RUB4,000-4,300 (US$128.7-138.4) per tonne for third-grade wheat, RUB3,800-4,000 (US$122.3-128.7) per tonne for fourth-grade wheat. New crop fourth-grade wheat is expected to be at RUB4,500 (US$144.8) per tonne.

 

However, the wheat crop harvesting has yet to start.

 

Barley, which is already being harvested, is offered in silos (IS) at RUB2,000-2,400 (US$64.4-77.2) per tonne, SovEcon said. Feed barley is offered at US$120 per tonne FOB Novorossiisk, IKAR said.

IKAR has lowered its grain output forecast because of abnormal heat in some regions to 87.5 million tonnes from previous 88.5 million, including 57 million tonnes of wheat down from previous 58 million.

 

New crop winter rapeseed purchase prices are expected to be in the range of RUB8.5-9 (US$0.27-0.29) per kg, which is close to export prices, IKAR said. SovEcon said new crop EXW rapeseed prices were 7,500-8,000 per tonne in North Caucasus.

 

Heavy rains in southern Russia may cause losses to potentially record harvest, IKAR added.