Grain prices continued their upward march on a shortage of offers from most regions, with the market preoccupied by prospects for the future harvest. Bad weather conditions have led to serious damage to crops sown in the Restive and Volgograd regions.
SovEcon has reduced its forecast for the 2007 crop to 74-77 million tonnes. Limits on Ukrainian grain exports are also lending support to prices. In the North Caucasus, the market was offering a price of 3,300-3,600 roubles a tonne on new-crop feed barley a few weeks ago.
The week before last it cost in the region of 3,600-4,000 roubles a tonne. In the first half of last week, it had risen to 4,500 roubles a tonne and in the second half of last week to 5,000 roubles a tonne (at farm gate, Krasnodar region).
Most exporters have completed their purchase campaigns, with prices in the range of 5,500-5,700 roubles a tonne, CPT Novorossiisk. With barley demand high, farmers are in no rush to sell, and individual offers of 5,500-5,700 roubles at farm gate are already being seen.
The starting prices for new-crop feed barley are at an unprecedented high. Harvesting of winter wheat in the North Caucasus starts in a week. Starting prices on fourth-grade wheat, the standard export grade, are expected on a level with feed barley and slightly higher.
The old-crop grain market is also continuing to rise. Demand on most grains remains shigh, and there are close to no offers of grain in many regions. In eastern regions, market players are noting growing interest in Kazakh wheat. Average prices for sunsets are continuing to rise and offer are high.
Large crushers are moving to purchasing winter rape from the new crop at prices in a range of 7,000-7,500 roubles a tonne CPT. Sunoil prices are also continuing to rise, adding 500 roubles a tonne in the last week. The maximum offers have risen to 24,000 roubles a tonne EXW.