Russian wheat prices broadly flat in thin trade

Russian wheat prices were broadly unchanged last week, after five weeks of consecutive growth, on the back of continuing support from a strong rouble in trade thinned by a public holiday, analysts said on Monday. Black Sea prices for Russian wheat with 12.5 percent protein content for March delivery were $191 a tonne free on board (FOB) at the end of last week, unchanged from the previous week, Russian agricultural consultancy IKAR said.
SovEcon, another Moscow-based consultancy, quoted FOB wheat at $191.5 a tonne at the end of last week, up $1 from a week earlier, and maize (corn) prices up $1 at $178 a tonne. Wheat prices were also supported by storms in ports, both consultancies said. Russia had a public holiday on February 23-24. IKAR also said FOB prices for the new wheat crop with 12.5 percent protein content and for July-August delivery rose $1 to $178 per tonne.
The rouble, up almost 6 percent against the dollar so far this year, is making Russian commodities less competitive on international markets, thus slowing grain exports. Russia could export 37 million tonnes of grain this 2016/17 marketing year, which runs until June 30, compared to a previously expected 40 million tonnes, TASS news agency cited Agriculture Minister Alexander Tkachev as saying on Monday.
"Unfortunately, the strong rouble is hindering exports," Tkachev said. Russia may harvest at least 105 million to 110 million tonnes of grain in 2017, he added. The country had a record grain crop of 119 million tonnes in 2016. Domestic prices for third- and fourth-class wheat, excluding delivery, both fell by 100 roubles to 10,450 roubles a tonne and to 8,950 roubles, respectively, in the European part of Russia at the end of last week, according to SovEcon.
The upcoming start of spring grain sowing campaign in March is depressing domestic prices as some farmers will need to sell some of their stock to raise funds for sowing, SovEcon added. Weather conditions remain satisfactory for winter grain so far. Sunflower seed fell 125 roubles to 19,625 roubles a tonne, SovEcon said. Domestic sunflower oil fell 500 roubles to 44,075 roubles, while export prices were down $5 to $740 a tonne. IKAR's white sugar price index for southern Russia had risen $7 to $549.6 a tonne as of February 22.