Russia Wheat Export Prices close to Peak 2019 – 2020 Season !!!

https://www.agroinvestor.ru / Elena Maximova, Tatyana Kulistikova Agroinvestor November 26, 2019

AT THE END OF NOVEMBER, GRAIN EXPORT IS EXPECTED TO BE MORE THAN 1 MILLION TONS BELOW THE OCTOBER FIGURE.

Wheat export prices close to peak season again, in the near future, price increases may continue  !!!

Export prices for wheat with a protein of 12.5% ​​almost returned to the seasonal maximum level of $ 210.5 / t (FOB deep-sea ports), which was established a month earlier. Last week, wheat went up by $ 1 / t and traded at $ 209.5 / t, it follows from the monitoring of the analytical center SovEkon. The market grew amid low domestic supply.

Farmers are not comfortable with current prices, and they still hold wheat. According to the official data of traders, the prices for wheat with a protein of 12.5% ​​CPT in deep-sea ports for the third week in a row basically remain unchanged and remain at 12.3-12.5 thousand rubles / ton. However, more and more traders are starting to unofficially raise prices, trying to buy more grain to fulfill their obligations, while some are running out of contract time, SovEcon draws attention.

Slow sales and growing demand from exporters and processors on the eve of the new year support the domestic market. Average prices for wheat of the 3rd and 4th classes increased by 125 rubles. up to 11350 rub./t and 11250 rub./t (EXW, in the European part of Russia). Feed wheat prices increased by 50 rubles. up to 10375 rub./t, reports SovEkon. According to the Ministry of Agriculture, as of November 21, the average Russian prices for wheat of the 3rd class amounted to 10,519 rubles / ton (-0.3% per week), of the 4th class – 9754 rubles / ton (+ 0.2%), 5 – 9097 rub./t (no change).

“From the point of view of prices at which it is actually possible to sell grain, we did not observe growth last week: they, like two weeks earlier, were at $ 206 per ton,” Igor Pavensky, head of the Rusagrotrans analytical center, commented to Agroinvestor. “Although supply prices did indeed rise to $ 208-210 / t, there was no demand for wheat at such prices.”

In the near future, wheat may well rise in price, he said. Firstly, in France, Great Britain and Ukraine there is a lack of winter crops due to adverse weather conditions, secondly, in Russia it has sharply cooled, but there is still not enough snow cover, and there are certain problems with moisture reserves, which can negatively affect on winter crops. Although this situation, of course, can still be corrected, Pavensky clarifies.

In addition, the main competing exporters — Europe, the USA, and Ukraine — shipped 9.5 million tons more grain from the beginning of the season until mid-November than a year ago, and the remaining export potential until the end of the current season in these countries is lower than 2018 / 19th, the expert continues. Argentina also exerts a certain price pressure on the market, which by the end of the year comes out with a new crop and competes with Russian wheat in the markets of Southeast Asia.

At the same time, the pace of wheat exports from Russia in November decreased significantly. According to Pavensky’s forecast, export will be significantly less than a month earlier, and will amount to about 2.3-2.5 million tons against 3.59 million tons in October. Including this is due to a sharp decrease in water levels in the ports of the Sea of ​​Azov, and, accordingly, shipments from them for export, including through the port of Kavkaz, he explains. “Egypt became the main buyer of Russian grain in general and wheat in particular in November, and Turkey and Bangladesh are also in the top 3,” adds Pavensky. According to the FCS, on November 21, since the beginning of the season, Russia has delivered abroad 19.8 million tons of grain (excluding trade with EAEU countries).

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