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Volga Baikal AGRO NEWS Update on Russian Grain Prices !!!
Export quotes for Black Sea wheat renewed four-year high.
Record grain prices are yet to come.
Exporters are interested in reducing purchase prices due to the expected introduction of the duty.
According to the analytical center Rusagrotrans, export prices for Russian wheat with 12.5% protein for delivery in January – first half of February rose to $ 260 per tonne (FOB), which is $ 6.5 more than in the previous week. According to monitoring by Refinitiv, export quotations for Black Sea wheat rose sharply last week and hit a new four-year high as a result of increased external demand as well as logistical difficulties in Russian ports. According to the director of the analytical center SovEcon Andrey Sizov, in the past two weeks, prices on the Russian FOB have slightly increased for three reasons: due to the strengthening of world markets, the announcement of the introduction of an export duty on wheat from February 15, 2021 and delays in the issuance of customs documents.
SovEcon forecasts there will be new prices records this season. “According to our estimates, we can see prices for Black Sea wheat at the level of $ 270 per ton and higher. There are two main growth factors. The first is the extremely tense situation with corn, mainly due to Chinese imports. In addition, there are still unfavorable forecasts for the corn harvest in South America, – Sizov told to Agroinvestor. – The second factor is the introduction of export duties in Russia, the value of which is greatly underestimated by our market. After the release of the information on the duty, we reduced the forecast for wheat exports from 40.8 million tons to 38.3 million tons, but after a more in-depth analysis, we believe that this is too optimistic figure, in reality, export will be even lower.
Some regions are experiencing difficulties with the transit of grain to ports by rail, which may be due to artificial restraint of export rates before the introduction of export restrictions, Kommersant reported, citing market sources. According to one of them, cargo idle time in the Volga region towards the southern ports reaches up to a month. Earlier, grain traders reported that they faced delays in obtaining customs documents for export, however, industry analysts noted that these were isolated cases.
This year, the grain harvest in Russia amounted to almost 133 million, including 85.7 million tons of wheat. “If for grain the final harvest corresponds to our forecasts, then for wheat it is 1.4 million tons higher. Thus, the export potential for wheat is 42 million tons, and the total grain export, according to our forecasts, may reach 52.7 million tons, including 5.5 million tons of barley and 3.2 million tons of corn, ”the data Tyurin.
“By the beginning of January, 60% of the export potential of grain will be shipped to foreign markets, including 63% of wheat, 55% of barley, 23% of corn. In general, the export potential for grains in January-June 2021 will amount to 21.8 million tons, which exceeds the established quota of 17.5 million tons, ”Tyurina specifies. She estimates the export potential for wheat at 15.6 million tons and believes that all this volume will be exported.
Also, prices may be affected by the poor condition of winter crops in Russia and the not very good condition of crops in the main regions of wheat production in the United States, Sizov continues. This means that the market can be very volatile and show rapid growth during unfavorable weather events, for example, with the onset of frosts, since, due to the weak condition of winter crops, they can have a worse effect on them than in years when winter crops go into winter. good condition. At the end of November, Roshydromet estimated the share of winter crops in poor condition at 22%, which is an anti-record.
