Russian wheat export prices rise on supply dip

MOSCOW: Russian wheat export prices rose slightly last week on seasonal declines in supply, analysts and traders said on Monday.

The world's largest wheat exporter has already exported more than 22 million tonnes of grain since the start of the season,  from the 38-39 million tonnes that Russia's agriculture ministry estimates to be available in the 2018/19 season.

Black Sea prices for Russian wheat with 12.5 percent protein content and for delivery in December were $225 a tonne free on board (FOB) at the end of last week, up $3 from a week earlier, Russian agricultural consultancy IKAR said in a note.

Refinitiv pegged FOB wheat prices up $2.50  to $225.50 a tonne. SovEcon, another Moscow-based consultancy, quoted FOB barley prices up $2 to $237 a tonne.

As of Nov. 15, Russia had exported 22.6 million tonnes of grain since the start of the 2018/19 season on July 1. That was up 17 percent from a year ago and included 19.2 million tonnes of wheat, the agriculture ministry said.

Russia is finishing 2018's grain harvesting and the sowing of winter grains for the 2019 crop.

The agriculture ministry raised its forecast for the 2018 grain crop by 1 million tonnes to 110 million tonnes last week but kept its forecast for 2018/19 grain exports unchanged at 38-39 million tonnes.

SovEcon currently expects Russia's 2018 grain crop to reach 110.2 million tonnes, including 70.7 million tonnes of wheat, 9.9 million tonnes of maize (corn) and 16.8 million tonnes of barley.

The conditions for winter grain sowing is worse than the average of recent years in large parts of Russia and Ukraine because of the lack of rain in recent months, it said.

A cold spell is expected to come to the European part of Russia soon, with temperatures in the Volga region seen falling below -15 Celsius (5 Fahrenheit) in the next two weeks, potentially damaging part of the sowing, SovEcon added.

Domestic prices for third-class wheat fell 100 roubles to 10,775 roubles ($163) a tonne at the end of last week in the European part of Russia on an ex-works basis, SovEcon said. Ex-works supply does not include delivery costs.

Sunflower seed prices rose by 150 roubles to 17,500 roubles a tonne, SovEcon said. Domestic prices for sunflower oil were down 400 roubles at 42,600 roubles a tonne, while export prices fell $10 to $630 a tonne.

IKAR's white sugar price index for southern Russia was at $555.30 a tonne on Nov. 16, up $4 from a week earlier.