October 18, 2011
Russian grain prices continue decreasing
Despite declaring that grain exports may be halted if they surpass 23-24 million tonnes in the present season, Russian domestic grain prices kept falling as harvesting approached to an end last week, according to analysts on Monday (Oct 17).
However, some cereals dollar-denominated prices rose and some remained stable on a stronger rouble, they said.
"The government announcement about potential export restrictions after reaching 23 million tonnes threshold did not produce much impression on the market players," the Institute for Agricultural Market Studies (IKAR) said in a weekly note.
The average EXW third-grade milling wheat price fell RUB125 (US$4.04) to RUB5,925 (US$191.57) per tonne in European Russia, fourth-grade by RUB150 (US$4.85) to RUB5,075 (US$164.09) and feed wheat by RUB50 (US$1.62) to RUB5,075 (US$ US$164.09) per tonne, SovEcon agricultural analysts said in a separate note.
It said the feed barley price declined by RUB100 (US$3.23) to RUB5,250 (US$169.75) and feed corn by RUB350 (US$11.32) to RUB6,250 (US$202.08) per tonne.
The FOB prices for wheat with 11.5% protein content hovered within the range of US$230-235 per tonne in Novorossiisk. Azov sea and Don river shallow water terminals lost about US$3 to US$197 per tonne, IKAR said.
IKAR said prices of standard fourth-grade wheat including delivery (CPT) to Novorossiisk fell to RUB7,300 (US$236.03) per tonne from RUB7,500 (US$242.50), while SovEcon believes that the price fell even further to RUB7,200 (US$232.80) per tonne from RUB7,300-7,400 (US$236.03-239.27).
"Traders say that exporters have accumulated large stocks of cereals," SovEcon said.
IKAR said that EXW wheat prices in southern Russia declined in roubles, but strengthened in dollars. Third-grade wheat rose by US$6 to US$196 per tonne, fourth-grade and fifth-grade by US$5 to US$188 per tonne and US$175 per tonne, respectively.
Corn prices also declined in roubles, but in dollar terms they remained unchanged at US$175 per tonne in dollars, IKAR said.
"The strengthening of the rouble is a negative factor for the domestic market," SovEcon said.
The Russian rouble recorded last week its biggest weekly gain since late 2009, propped up by tight liquidity before tax payments and by higher oil prices thanks to the global improvement in risk perception.