July 30, 2013


Russia's wheat prices remain steady on strong export demand


After falling over the previous two months due to strong demand from customers in North Africa and Middle East, Russia's wheat export prices were flat last week.


Russia, one of the world's leading wheat exporters, had harvested 28 million tonnes of wheat from 36% of its planted area as of July 26. It hopes to increase the crop by one third to at least 50 million tonnes after last year's drought.


Wheat export prices typically fall in summer months as harvesting gathers pace and supply increases.


"There is high demand for Russia's July grains exports, mostly due to an incredible level of activity in the Azov Sea ports," Dmitry Rylko, the head of the Institute for Agricultural Market Studies (IKAR), said in a note.


The country exported more than 1.65 million tonnes of grain, including 1.36 million tonnes of wheat, during July 1-25, he said. Exports have already exceeded July forecasts, which were upgraded last week.


Prices for wheat supplies with 12.5% protein content were unchanged at US$252/tonne in the Black Sea on a free-on-board (FOB) basis last week, according to IKAR. Prices in shallow-water ports rose by US$1 to US$222/tonne.


IKAR's quoted prices for wheat with 11.5% protein content were also unchanged at US$245/tonne. SovEcon agriculture analysts quoted them at US$246-251/tonne in deep-water ports and at US$230-233/tonne in shallow-water ports.


Stable Russian wheat bucked the global wheat price trend which has come under pressure as harvesting gathers pace and from lower corn prices. November milling wheat in Paris was down 0.9% at €186 (US$250) a tonne by 1031 GMT.


Egypt, the world's biggest importer of wheat and the largest importer of Russian wheat, last week bought 240,000 tonnes of Russian, Romanian and Ukrainian wheat for shipment on September 1-10. It was Egypt's third international tender since February and the second since the ousting of President Mohamed Mursi on July 3.


Apart from Egypt, Russian wheat trading has been active with other traditional clients such as Turkey, Iran and Iraq, and with less frequent customers such as South Africa, IKAR said last week.


Offer prices for a new crop, rapeseed, fell to RUB11,000-11,500 (US$335-350) per tonne from RUB11,800-12,300 (US$359-374) per tonne on excluding works (EXW) in the North Caucasus region, SovEcon added.

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