July 7, 2009
Russia grain prices down on low export demand
Russian grain prices fell further last week as importing nations are expecting large wheat crops, analysts said Monday (Jul 6).
Total import wheat demand from Russia's five largest markets has declined to 18 million tonnes from 27 million tonnes, according to the Institute for Agricultural Market Studies (IKAR).
SovEcon said there were few deals last week as producers did not want to sell at low prices, while demand was low and importers were not in a hurry to buy.
Bid prices for Russian fourth grade milling wheat were RUB3,400 to RUB3,700 per tonne including delivery to silos, and RUB2,400 to RUB2,700 for feed wheat.
Offer prices for fourth-grade milling wheat were RUB4,000 per tonne last week, SovEcon said.
IKAR said forward contracts for ordinary milling wheat had declined to US$165 per tonne, FOB Novorossiisk. Feed wheat forward export prices fell to US$130 per tonne, as neighbouring Ukraine expects a large crop.
Internal prices for old crop grain in southern Russia last week lost US$5-US$13 per tonne, IKAR said.
Russia has lost the two most recent Egyptian tenders, as Egypt's government bought French and US wheat, while cheaper Russian grain failed even with the new demand that it should contain no more than one percent grain damaged by wheat bug.
The new crop demonstrates some five-percent lower yields of winter barley and 10- to 12-percent lower yields of winter wheat in comparison with last year's record harvest, IKAR said.
SovEcon expects that the government, which plans to start intervention purchases on August 1, may provide support to Russian grain prices.
Crude sunoil export prices declined by US$10 to US$730 per tonne, while domestic sunseed purchase prices fell to US$285-US$295 per tonne, IKAR said. SovEcon said crude sunoil lost RUB350 per tonne last week on high supply and low exporters' demand.
IKAR said the range of prices for winter rapeseed in southern Russia of US$230-US$250 per tonne suggest that old crop sunseed purchase prices will continue to decline to acceptable levels.
SovEcon said initial new crop rapeseed bid prices were in the range of RUB7,500 to RUB8,000 per tonne including delivery to crushers.
US$1 = RUB31.4142 (Jul 7)
