Russian grain prices keep falling as exports restart

Russian grain prices fell last week ahead of the exports restart, as major traders stopped purchases due to a lack of demand amid falling international prices, analysts said on Monday. Russian grain sales are expected to be slow after Moscow's return to the global market after an absence of nearly a year, as buyers appear in no hurry to snap up supplies, but later appetite for cheap Russian wheat may restore.
"As the international markets keep going down and buyers remain cautious, we expect domestic prices to continue declining," SovEcon agricultural analysts said in a weekly note. "Prices of $200 per tonne (including carriage to Novorossiisk) may be reached in the nearest future."
By the end of last week the FOB price for 11.5 percent protein milling wheat were fixed at $240 per tonne, compared to $240-$245 a week before and for 12.5 percent wheat at $250 with further bearish signs, the Institute for Agricultural Market Studies (IKAR) said in its weekly note.
At shallow water Azov sea ports, ordinary wheat price was about $115 per tonne, compared with $115-$120 a week before, IKAR said. Barley prices fell to $203 per tonne from $215 per tonne. Average third-grade milling wheat EXW offer prices declined by 225 roubles ($8.10) to 6,250 roubles per tonne in the European part of Russia, SovEcon said.
Fourth-grade wheat price declined by 325 roubles to 6,000 roubles per tonne, feed wheat by 150 roubles to 5,525 roubles, milling rye by 250 roubles to 5,100 roubles per tonne, feed barley by 400 roubles to 5,100 roubles per tonne, it said. "Exporters have stopped wheat purchases in Novorossiisk amid declining bearish prices on the international markets, where bears dominate," SovEcon said.
"The reason behind the halt is not only the downward trend on the world markets, but the fact that many traders have built sufficient stocks to cover already signed contracts." It said new crop feed barley prices are named in the region of 4,000-4,500 roubles per tonne, and fourth-grade wheat at 5,400-5,500 per tonne including carriage at shallow water ports.
SovEcon said that good prospects of the new grain crop may make it to revise its forecast of 82-86 million tonnes upwards. Ikar said that excessive rains in some producing regions hamper the harvesting and damage the quality of grain. Crude sunoil prices declined slightly to $1405 per tonne from $1409 with old crop sunseed market extremely thin, IKAR said.