Russian grain prices stable due to modest demand

Russian grain prices were stable last week due to modest demand ahead of possible grain supply from Kazakhstan and from Russian state grain stocks during government interventions, analysts said. Russian wheat with 12.5 percent protein content slightly strengthened to $283 per tonne from $280 per tonne on a free-on-board basis (FOB) in the port of Novorossiisk, The Institute for Agricultural Market Studies (IKAR) said.
"However, it mostly happened because of combination of rouble strengthening and inability of exporters to originate at lower prices. General demand on the Russian wheat at such prices is quite modest," it added. SovEcon analysts wrote in a weekly market roundup that fourth-grade wheat purchasing prices in Russian deep-water ports declined to 8,200-8,400 roubles ($280-$290) per tonne last week from 8,400 roubles ($290) per tonne on a carriage paid to (CPT) basis.
Average domestic prices for the third-grade milling wheat stayed at 6,725 roubles ($230) per tonne ex-works in European Russia. Fourth-grade prices were also flat at 6,700 roubles ($230) per tonne ex-works, SovEcon said. US CBOT May wheat slipped 0.26 percent to $6.72 per bushel, still pressured by abundant wheat stocks globally. The most active May contract in western Europe was up 1.0 euros or 0.48 percent at 211.50 euros a tonne.
Russia, by contrast, has little left in the way of market stocks and has all but dropped out of the running to supply its biggest wheat buyer, Egypt, which has turned to US wheat to cover its needs from April onward. Suppliers of grain from Russian ports were focusing on incoming supplies from Kazakhstan and on possible sales from the Russian government grain stocks in the course of market interventions.
Russia can export up to 1.5 million tonnes of grain to be sold from intervention stocks in the European part of the country during planned sales by the state, a government source told Reuters on Monday. SovEcon has said intervention sales could start no earlier than late March, when the level of intervention prices and tender procedure were likely to become official.
Bad weather has also hampered Russian exports. Unusually harsh conditions have caused the sporadic closure of Russia's main deep-water export port, but Russian loadings are expected to rise again with the arrival of Kazakh wheat in Novorossiisk and the imminent thaw of shallow-water ports on the Azov sea.
"Azov will return to ordinary work in the first or in the second 10 days of March," a trader said. IKAR said that sales of grain from shallow water ports has resumed and April requirements were covered. On sunseeds, the purchase price index was unchanged in rouble terms and stayed at 10,980 per tonne, while it rose lightly in dollars and reached $375 per tonne from $371, IKAR said.
Crushers' needs were well covered and farms retained stocks, IKAR added. "There might be a price correction down in the nearest weeks," IKAR said. SovEcon said the average sunseed prices added 200 roubles and reached 10,975 roubles ($380) per tonne. Crude sunoil prices strengthened to 30,600 roubles per tonne from 30,540 roubles, while in dollar it reached $1,045 per tonne, up $19, IKAR added.