US-Russia wheat price spread narrows as Black Sea supplies tighten

SINGAPORE: The spread between US and Russian wheat is narrowing rapidly as supplies in the Black Sea region tightened following a hectic export campaign since the middle of last year, boosting hopes of higher sales of North American cargoes.

Even though Russian wheat is still cheaper than US grain, the spread between the two has narrowed to about $15 a tonne on a free-on-board basis, from more than $50 a tonne in August, according to Refinitiv Eikon data.

"US wheat has been uncompetitive for quite some time as compared with Russian wheat, but the spread has narrowed and we could see some sales of US wheat taking place in the coming month to Asia, the Middle East and other markets," said Phin Ziebell, agribusiness economist, National Australia Bank.

Since the beginning of October, Russian wheat has gained more than 10 percent, while US wheat has added over 6 percent.