Russian wheat export prices rise as bad weather persists at Black Sea ports

MOSCOW: Russian wheat export prices rose for the second week in a row on persistent bad weather at Black Sea ports, which analysts say will continue to hold back shipments.

The price of Russian wheat with 12.5percent protein content for free-on-board (FOB) delivery at the beginning of March was USD229.0 a metric ton at the end of last week, up USD1.50 from a week earlier, said Dmitry Rylko, head of the IKAR consultancy.

“We see a gradual strengthening of FOB prices caused by very severe weather conditions in the Black Sea and a reduction in export shipments,” Rylko said.

“The weather is breaking all records for January. More than half of the days this month will have bad weather, compared to a maximum of 8-9 days usually in January.”

IKAR projects January wheat exports at less than 3 million tons, as expected a week earlier. “So far, it (the volume of January exports) is steadily heading towards 2.5 million tons,” Rylko said.

Sovecon estimated the price for the same type of Russian wheat at USD228-USD230 a ton FOB, compared with USD226-USD228 at the end of the previous week. The agency kept its forecast for January wheat exports at 3 million tons.

Cold weather has continued in central Russia and the Volga region, but substantial snow cover is mitigating the potential negative impact of the cold weather on winter crops, Rylko said.

He noted that the possible loss of snow cover in the south of the country next week and sprouting of vegetation is causing much greater concern. Sovecon said on December 22 that it could cut its forecast for Russia’s 2026 wheat crop from 83.8 million tons if a cold spell across the country persists for a week or longer.

Russia launched the first spot trading of wheat on an export basis last week in an effort to increase pricing transparency and introduce domestic benchmarks.