June 5, 2012


Russia wheat export prices rise slightly on weak rouble



A weak rouble brought about a slight increase for Russian wheat export prices last week, but increases were limited by low market activity in anticipation of a new crop, analysts said on Monday (June 4).


"Demand is low. Continued weakening of the rouble remains positive for exports," SovEcon agricultural analysts said in a weekly note, as the rouble lost almost 15% against the dollar in May.


The rouble dipped to its lowest level in three years on Friday (June 1), pressured by local demand for foreign currencies and outflows of capital from Russia.


SovEcon said the purchase price of wheat with 11.5% protein content in Russian deep-water ports rose to 7,800 roubles (US$230) per tonne last week from 7,600-7,700 roubles on a carriage-paid-to (CPT) basis.


Large operators are busy with shipments in line with earlier concluded contracts, while many traders have taken holidays, SovEcon added.


The Institute for Agriculture Market Studies (IKAR) expects forward deep water wheat export prices for the new harvest in dollar terms at about US$273-275 per tonne, or flat with the previous level.


Forward shallow water wheat prices were also seen unchanged at US$250-255 per tonne, while forward export prices for new harvest feed barley were seen at around US$240-245 per tonne, IKAR added in a note.


Global wheat prices rose in May on concerns that adverse weather in the world's top suppliers the United States, Russia and Australia are hitting output.


Since then rainfall in key grain-growing regions of Russia and Ukraine has raised hopes the damage to the coming 2012/13 crop from a severe drought will not become any worse.


Russia's state forecaster said on Monday the key southern agricultural regions saw rains last weekend, with further rainfall expected this week.


Meanwhile, Chicago wheat edged higher on Monday following four straight sessions of losses, with weather concerns overriding worries about demand being hit by the debt problems in the euro zone and a slowdown in China, the world's largest commodities importer.


Chicago July wheat added 0.53% to US$6.15-1/2 a bushel on Monday, after dropping almost 5% in the last session.

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