November 8, 2011


Russian grain prices stable


Russian grain prices were stable last week with export volumes for July-October staying at a record level, analyst said.


"Probably, the market is close to its bottom," SovEcon agricultural market analysts said.


Average EXW third and fourth-grade milling wheat prices were unchanged last week in the EU part of Russia at RUB5,825 (US$189.59) and RUB5,625 (US$183.08) per tonne, respectively, SovEcon said in a weekly note.


It said feed wheat prices rose by RUB50-5,100 (US$1.64-167.46). Milling rye prices rose by RUB250-4,250 (US$8.21-139.55) per tonne, while corn prices fell by RUB300-5,600 (US$9.85-183.88) as new bumper crop grain flooded the market.


Exporters' bid prices for fourth grade wheat at deep sea ports remained stable last week at RUB7,000-7,200 (US$230-236) per tonne including delivery (CPT), although some firms raised this to RUB7,300 (US$240) per tonne, SovEcon said, adding that exporters were not in a hurry to make new purchases.


"We have observed a definite slowdown of export activities in recent weeks," the Institute for Agricultural Market Studies (IKAR) said in a separate note.


It said the decline was caused by the seasonal worsening of weather at ports, as well as pressure from competitors Ukraine and Kazakhstan and transportation problems. But exports were still moving at a record pace for the July-October period.


According to IKAR's preliminary estimates, Russia exported 2.83 million tonnes of grain in October, down from 3.8 million in September, and down from the previous October record of 3.2 million tonnes set in 2007.


Since the beginning of July, Russia had exported a record 12.4 million tonnes of grains, setting a new record for the period since 2008/09, when 8.7 million tonnes were exported in July-October, IKAR said.


It said Russia exported a record 11.1 million tonnes of wheat in July-October this season, up from the previous record for the period of 7.74 million tonnes shipped in the same period of 2008/09.


FOB prices for ordinary wheat with 11.5% protein content remained unchanged at US$244 per tonne in Novorossiisk and at US$205-210 at shallow water ports, IKAR said.


Sunseed prices declined to US$280 per tonne from US$293, it said. Prices fell in all key regions, including southern Russia.


SovEcon said sunseed prices fell by RUB175-9,300 (US$5.75-305.37) per tonne. But the decline has slowed down as prices lost RUB375 (US$12.31) in the previous week.


Sunoil prices declined slightly in dollar terms to US$1,082 per tonne from US$1,101, IKAR said, while SovEcon said prices lost RUB75-33,925 (US$2.46-1,114) per tonne.


"Sunoil exports may reach record volumes this season, and sunseeds exports may become profitable even with the existing 20% export tariff," SovEcon said.

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