August 23, 2011


Russian grain prices increase continuously last week



Russian grain prices rose continuously last week, with milling wheat leading because its present supply is estimated less than expected previously, according to analysts on Monday (Aug 22).


The offer price of third-grade milling wheat EXW rose RUB325 (US$11.46) to RUB5,540 (US$190.32) per tonne in the European part of Russia, while fourth-grade milling wheat rose by RUB225 (US$7.73) to RUB5,350 (US$190) per tonne, SovEcon agricultural analysts said.


"Feed wheat rose by a modest RUB50 (US$1.72) to RUB4,575 (US$157.17) per tonne," SovEcon said.


"The supply of feed wheat is at a high level, while milling wheat's supply is limited. Market players in many producing regions report lower quality of this season's wheat crop earlier than expected."


Barley EXW price rose RUB125 (US$4.29) to RUB5,625 (US$193.25) per tonne.


"Exporters increased bid prices at ports," SovEcon said. "Market players report that some exporters hurry to implement "burning" contracts while problems with cargo transportation remain," SovEcon said.


Following the results of most recent tenders, the FOB Black Sea price of Russian ordinary milling wheat with 11.5% protein content (fourth-grade) rose to US$267-268 per tonne from US$255-257, the Institute for Agricultural Market Studies (IKAR) said.

"Russia remains the cheapest supplier of ordinary milling wheat with about US$20 advantage on the key competitors," IKAR said in a weekly note

Domestic CPT price for fourth-grade wheat also strengthened in Novorossiisk to RUB6,800 (US$233.61) per tonne from RUB6,600 (US$226.74), it said.


In Novorossiisk, buyers offered RUB6,700-6,800 (US$230.18-233.61) per tonne for fourth grade wheat compared to RUB6,400-6,500 (US$219.87-223.31) a week before, while at shallow water ports, prices rose by RUB200-400 (US$6.87-13.74) to RUB6,000-6,200 (US$206.13-213) per tonne, SovEcon said.


FOB price for higher quality wheat with 12.5% protein rose to US$275 per tonne from US$265 in Novorossiisk, IKAR said.


It said, shallow water FOB price for 11.5 protein wheat increased to US$217-220 per tonne from around US$210.


Feed barley price at deep sea ports remained unchanged at US$280 per tonne, while at shallow ports it declined slightly to US$237-239 from US$240, IKAR said.


"We expect the upward trend on the wheat market to remain in the short term," SovEcon said.


"Barley is likely to follow the same trend, as traders in the Black Soil region say that malting barley crop may be lower than expected, which may force breweries to buy feed barley for malting purposes, pushing prices up."


Spring rapeseed purchase prices were set at about RUB12,000 (US$412.26) per tonne. New harvest rapeseed oil in southern Russia is traded at about RUB1,200 (US$41.23) per tonne, it said.

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