November 16, 2010

Russian grain prices go up on stock shortage fears

Russia's grain prices rose further last week on expectations of short supply in all the country's regions, analysts said Monday (Nov 15).

Russia'a Agriculture Ministry confirmed last week it expects the 2010 grain crop to be 60.5 million tonnes, a 38% decline from the 97 million tonnes reaped in 2009, after the worst drought in more than a century.

Third-grade milling wheat rose by US$5 to US$201 per tonne in southern Russia (EXW), fourth-grade wheat by US$3 to US$191 per tonne, feed wheat by US$2 to US$189 per tonne, the Institute for Agricultural Market Studies (IKAR) analysts said.

Feed barley increased by US$10 reaching a record of US$224 per tonne, corn increased by US$6 to US$258 per tonne.

SovEcon agricultural analysts said in their note offer prices for third-grade wheat rose by RUB250 (US$8.12) to RUB6,475 (US$209.07) per tonne EXW in European Russia, fourth-grade by RUB175 (US$5.65) to RUB6,125 (US$197.77) and feed wheat by RUB250 (US$8.07) to RUB5,925 (US$191.31) per tonne.

Feed barley rose by RUB200 (US$6.46) to RUB7,200 (US$232.48) per tonne. Wheat prices rose also in Siberia after animal breeders and millers raised their bids. Wheat flour prices started rising after a period of decline, SovEcon said.

Grain shipments from southern Russia were slow last week due to logistical bottlenecks and inspections carried out by the animal and plant health watchdog Rosselkhoznadzor, IKAR said.

Sunseed offer prices rose by just RUB50 (US$1.61) to RUB20,675 (US$667.58) per tonne after most crushers had stopped raising bid prices and some even lowered them.

SovEcon believes that sunseed prices may decline in the near future, but the decline may be short-lived, as sunoil prices are rising both in Russia and abroad. Average crude sunoil prices rose by RUB2,000 (US$64.57) to RUB46,325 (US$1,495.80) per tonne.