November 1, 2011
Russia's grain prices stay unchanged
The majority of Russian domestic grain prices remained almost the same last week and lagged behind global upward pattern, but analysts said a rise is possible in the future.
"A rise on the international wheat market does not mean a simultaneous rise on the domestic market," SovEcon agricultural analysts said in a weekly note.
"It is quite possible that Russian domestic market may be relatively stable or even keep declining slowly in the nearest future. But it is likely to follow the international trend with a certain lag."
On Friday (Oct 28), CBOT wheat prices ended up 2.3%, recording its third straight week of gains and taking the overall three-week increase to 6.4%.
SovEcon added that a solution of Greece's debt problems will strengthen the euro and thus will prop up dollar-denominated European wheat prices.
Last week, average EXW third- and fourth-grade milling wheat, as well as feed barley prices lost just RUB25 ($0.83) per tonne to RUB5,825 (US$192.69), RUB5,625 (US$186.07) and RUB5,175 (US$171.19), respectively, in the European part of Russia, SovEcon said.
It said corn was an exception, as its prices fell by RUB300 (US$9.92) to RUB5,700 (US$188.55) in North Caucasus on expectations of a fresh bumper crop.
SovEcon said exporters kept CPT (including delivery) bid prices for fourth-grade wheat unchanged at deep sea ports at RUB7,000-7,200 (US$231.56-238.17) per tonne, while they lowered them by RUB100 (US$3.31) to RUB6,200-6,300 (US$205.09-208.40) at shallow water ports.
Traders said there was a rise in demand for third-grade wheat at shallow water ports. Ordinary wheat was sought at RUB6,600-6,700 (US$218.33-221.63) per tonne, while wheat with high protein of 14.5% was sought at RUB6,900-7,000 (US$228.25-231.56).
FOB price for wheat with 11.5% protein content rose to US$244 per tonne from US$235, mainly due to improvements in the world macro-economic situation, the Institute for Agricultural Market Studies (IKAR) said in a separate note.
Prices at Azov-Don shallow water terminals remained unchanged at US$205 per tonne, same as corn, it said.
Russian grain market players complained last week about logistical problems, and some traders in the Central Black Soil areas, confronted with a shortage or railway wagons, started selling domestically the grain they have meant to export, IKAR said.
However, according to preliminary estimates, between July 1 and October 22, Russia exported a record high 11.6 million tonnes of grain, including 10.1 million tonnes of wheat, it said.
Last week Egypt, the main buyer of Russian wheat bought 120,000 tonnes of Russian cereal at US$243.4 per tonne.
But Russian grain lost the following tender, at which 120,000 tonnes of Ukrainian wheat were bought at US$247.92-249.30. Russian wheat was offered at higher prices of US$256.45-265.98 at the tender.