Russian wheat prices fall due to more competitive levels

Russian wheat export prices fell for the second week in a row last week, making them more competitive on the global market, industry analysts said.

Black Sea prices for Russian wheat with 12.5% protein content were down $1 to $206 per tonne on a free on board (FOB) basis at the end of last week, agricultural consultancy IKAR said in a note.

SovEcon, another agricultural consultancy in Moscow, said wheat prices were down $2 to $207.5 per tonne. Barley prices rose $2 to $187 per tonne. Last week, Egypt's state grains buyer, the General Authority for Supply Commodities (GASC) bought 55,000 tonnes of Russian wheat. GASC mainly bought French wheat however, as Russian wheat was being offered at a significantly higher price.

The market is keeping an eye on weather conditions in France, Germany and Great Britain, which remain too wet for winter planting, SovEcon said, adding that the United States is seeing the lowest winter wheat acreage in 110 years.

Russia exported 18.1 million tonnes of grain between the start of the 2019/20 season on July 1 and Nov. 7, SovEcon said. Total grain exports were down 15% compared to the same period the previous year.

Of this, it exported 15.8 million tonnes of wheat, down 13% on the same period the previous year, and 1.6 million tonnes of barley, down 34%, SovEcon said, citing customs data. SovEcon said the current pace of exports is slow, adding that October grain exports totalled 4 million tonnes, including 3.6 million tonnes of wheat. Export volumes are expected to decline further in November, SovEcon said.

Russia has almost completed harvesting the 2019 crop and farmers have already collected 123.9 million tonnes of grain, SovEcon said. Prices for third-class wheat in European parts of Russia rose 25 roubles to 11,175 roubles ($175.11) a tonne on the domestic market by the end of last week, SovEcon said. That price was on an ex-works basis, which excludes delivery costs. SovEcon also said that as of Nov. 7, Russian farmers had sown 18.1 million hectares with winter crop, up from 17.6 million hectares during the same time the previous year.