Russian wheat prices pressured by forecasts of strong European harvest

MOSCOW: Russian wheat export prices remained under pressure last week by competition from other exporters amid strong forecasts for the European harvest as well as a weak rouble, analysts said.

Black Sea prices for wheat with 12.5% protein content fell $2 to $195 a tonne free on board (FOB) by the end of last week, Russian agricultural consultancy SovEcon said.

IKAR, another Moscow-based consultancy, also quoted FOB wheat at $195 a tonne. IKAR said earlier on Monday it had cut its 2019 domestic wheat crop forecast to 75.5 million tonnes from 76.4 million tonnes.

"(The European) crop looks good, (while) Russian wheat crop issues are not big enough to impress the market," SovEcon said. "The falling rouble may have been the only good news for exporters" last week, it added.

Russia has exported 3.88 million tonnes of grain since the start of the 2019/20 season, 17% less than during the same period the previous year, SovEcon said, citing data from Russian port authorities. That figure included 3.04 million tonnes of wheat.

On the domestic wheat market, prices continued to fall on the arrival of the new crop, though SovEcon said in Russia's southern region, prices were on the rise again.

Overall, prices for third-class wheat remained flat at 10,475 roubles ($161) a tonne at the end of last week in European parts of Russia on an ex-works basis, SovEcon said. Ex-works does not include delivery costs.

Sunflower seed prices rose by 75 roubles to 19,925 roubles a tonne, while domestic sunflower oil prices jumped by 925 roubles to 45,500 roubles a tonne, SovEcon said. FOB export prices for sunflower oil rose $5 to $745 a tonne.

IKAR said its price index for white sugar from southern Russia fell to $392 a tonne from $427.5 a week earlier.