Downgrade of Black Sea crop estimates lifts Russian wheat export prices

MOSCOW: Russian wheat export prices rose last week after downgrades to forecasts for this year's grain crop in the Black Sea area, including Russia and Ukraine, analysts said on Monday.

Wheat prices in Chicago, a benchmark for the global market, lost ground on Monday after a two-session rally which was sparked by lower production in key exporting countries in Europe and the Black Sea region.

Black Sea prices for the new crop of Russian wheat were at $198 a tonne on a free on board (FOB) basis at the end of last week, up $1.5 from a week earlier, SovEcon agriculture consultancy said in a note.

Data from agriculture market analysts at Thomson Reuters showed the wheat price was up $1.5 at $200.5 per tonne at the end of last week.

IKAR, another agriculture consultancy in Moscow, said Black Sea prices for Russian wheat and for delivery in August were down $0.5 at $199.5 at the start of this week. However, wheat contracts for November delivery were being set at around $215 per tonne, it added.

SovEcon pegged barley prices at $190.5 per tonne, up $1.

As of July 11, Russia had exported 1.1 million tonnes of grain since the start of the 2018/19 season on July 1, up 89 percent year-on-year, including 676,000 tonnes of wheat, the agriculture ministry said.

The sharp growth in exports was caused by an early start to Russia's 2018 grain harvesting due to dry weather in several regions. The world's largest wheat exporter has already harvested 27.2 million tonnes of grain, up from 12.2 million tonnes on the same date a year ago.

Domestic prices for third-class wheat were flat at 9,125 roubles ($147) a tonne in the European part of Russia on an ex-works basis, according to SovEcon.

Sunflower seed prices rose by 100 roubles to 21,250 roubles a tonne, SovEcon said. Domestic sunflower oil prices rose 675 roubles to 45,750 roubles, while export oil prices fell $5 to $715.

IKAR's white sugar price index for southern Russia was $458.1 a tonne as of July 13, down $24 from a week earlier.