Volga Baikal AGRO News Update on Forecast for Wheat Exports !!!

Volga Baikal AGRO News Update on Forecast for Wheat Exports !!!

USDA Foreign Agricultural Service (FAS USDA) in the April report raised the forecast for wheat exports from Russia by 0.5 million tons to 39.5 million tons. The closest pursuer – the EU countries – this marketing year can export 27.5 million tons of wheat, the US export potential is 27 million tons, the same – in Canada. In general, the global volume of wheat exports this season may amount to 196.3 million tons against 195.58 million tons in the March report. Against the background of an increase in the forecast for shipments and consumption, American analysts lowered the estimate of ending stocks of wheat from 301.2 million tons in March to 295.5 million tons.The forecast for the export of feed grains is at the level of the March report, 8.6 million tons.

Eduard Zernin, Chairman of the Grain Exporters Union, expects grain exports this season will amount to 46.5 million tons. “Do not get out of the small exporters, who received a quota, but are not going to use it”, -. he said to Agroinvestor. He added that in general, the dynamics of shipments is now weak. “The issue is not about the duty, this factor has already been won back. Rather, an increasing number of players – both exporters and importers – are expecting a further decline in domestic prices in Russia on the eve of the new harvest,” – said E.Zernin.

According to the forecast of the director of the analytical department of the Russian Grain Union( RZS) Elena Tyurina, grain exports from Russia this season will amount to 48 million tons, including 38 million tons of wheat, 6.3 million tons of barley and 2.5 million tons of corn. After the introduction of duties, shipments of all crops are reduced, she said. “For example, from April 1 to April 10, only 617 thousand tons of grain were exported, including 308 thousand tons of wheat, 218 thousand tons of barley, 52 thousand tons of corn. Compared to April 2020, the daily shipments of wheat fell by 70%, all grain – by 54%,” – E.Tyurin said.

Director General of the Institute for Agricultural Market Studies ( IKAR) Dmitry Rylko told to Agroinvestor. That the IKAR forecastfor the export of wheat this season – 38.5 million tons. “We have been keeping this forecast for quite a long time, and if we change it, it will most likely be downward,” the expert noted. He added that wheat shipments have now slowed sharply after the introduction of the duty, so April exports will be either at the level of March or lower.

World wheat prices fell in all major exporting countries, FAS USDA notes.In addition, some importers are postponing purchases in anticipation of lower prices for the new crop. “The biggest cut in the past month has been in Russia, where crop prospects have improved and export quotes have weakened amid ongoing export policies, including the announcement of floating duties on new crops,” the report said. So, according to FAS USDA, the price of Russian wheat fell to $ 240 per tonne (FOB).

The world price for a ton of Russian wheat with 12.5% ​​protein at the end of last week slightly increased and reached $ 247 (FOB), – Rylko said. “But this is a virtual price, there have been no deals and no deals. It is difficult to say about barley and corn – this market is extremely illiquid. For barley, the approximate export price is $ 220-230 per ton,” – Rylko said. According to the CPT price indicators calculated by the Union of Grain Exporters, Russian prices for wheat with 12.5% ​​protein as of April 09 amounted to 13.5 thousand rublesper ton in deep water and 12.8 thousand t / t for the same wheat in low water, – added Zernin.

According to Tyurina, Russia has a 5% advantage for wheat based on the selling price today. Its cost is now $ 247 per ton (FOB), the price of French wheat reaches $ 261 per ton, she noted. “We are forced to reduce our price, but at the same time the price limit between FOB and EXW is about $ 45, the duty does not fit into this cost. And this difference includes logistics for FOB and duty, – explained Tyurina. – The difference resulted from the cost of 3rd class wheat, which is $ 199 / t, and 4th class – $ 190 / t. We can say that the price of EXW has hardly decreased for the last two weeks, so there are no serious volumes for purchase. The world market puts pressure on us, we reduce the FOB price, thereby making the minimum export earnings, some companies may even work in the red.”

Tyurina added that 27 companies exported the main agricultural crops in March, and only 14 players remained in the first decade of April. In her opinion, this is influenced by several reasons: purchases, price competition with the world market and the fact that profitability for some market participants is approaching negative, export, especially wheat, becomes unprofitable. “For the time being, we fit in with barley, and for corn, too. It is with this that I associate the fact that our export of barley is increasing. For this crop we have a 3% ($ 51) difference with France, between FOB and EXW. We will not choose our export potential and by the beginning of the season we will come up with carry-over stocks by 4-4.5 million tons more than expected,”- E.Tyurina believes.

Source: Agroinvestor.ru