Volga Baikal AGRO News Update on Russian Agriculture Future Wheat Demand – Analysts Predict Growth in Russian Wheat Export !!!

Volga Baikal AGRO News Update on Russian Agriculture Future Wheat Demand – Analysts Predict Growth in Russian Wheat Export !!!

In September 2020, wheat supplies abroad may exceed 5 million tons.

Despite the active harvest, the prices for wheat in the world market are at a high level, due to which the rate of shipments from Russia is growing. Director of the Analytics Department of the Russian Grain Union( RZS) Elena Tyurina notes that the peak of export prices for wheat was on September 1, when it cost $ 230 / t on the French exchange, and $ 250 / t on the Chicago one. By the end of last week, there was a decrease to $ 228 / t and $ 246 / t, respectively.

“At the same time, our export prices for wheat continue to grow – over the last week on FOB Novorossiysk they increased by 2.6% and now average $ 213.5 / t,” Tyurina told Agroinvestor“. “Compared to world prices, the cost of our wheat remains attractive to buyers: now it is 6.5% cheaper than French wheat.” “Now the situation is favorable for us, since in France there is a serious reduction in wheat production and, as a result, very high prices for it, even for the domestic market,” adds the director of the SovEcon analytical center»Andrey Sizov.

In general, the wheat market will be quite tense this season, Tyurina believes. In the future, our prices will be supported by a decrease in export potential from the EU countries by 12.5 million tons and Ukraine by 3.2 million tons, respectively, Russia makes the market in the Black Sea region. “The reduction in the export potential of the main wheat supplying countries to the markets of Africa, Southeast Asia and the Middle East is greater than the increase in our export potential, and accordingly, the demand for Russian wheat will grow. This is already confirmed by active purchases from Egypt and Turkey, ”Tyurina comments.

Tyurina reminds that last season the maximum price for Russian wheat was in January – $ 230 per ton, and believes that this season we will reach the same level. The decline in prices will be in March-April after the first estimates of the new harvest in the main producing countries, she predicts.

The rise in wheat prices on the world market in recent weeks is justified by a likely decline in the US corn harvest, Sizov explains. Corn prices are increasing, and wheat prices are also increasing. “However, the upward trend in prices may have come to an end – it is possible that last week there was a peak in both world and Russian export prices,” the expert said. “If there are no force majeure – weather or political – then both world and Russian export prices will probably begin to decline.”

Now, there is an acceleration of exports from Russia against the background of relatively high prices; active sales are going on not only in the South, but also in the Center and the Volga region, where the harvest is very high. Thanks to this, large volumes of wheat shipments are possible in the next two months. “We do not exclude that in September and October it will be exported for 5 million tons of wheat or more,” Sizov estimates. “This has never happened before – the record was in August 2019 and amounted to 4.9 million tons.” According to RZS, Wheat exports in September amounted to 4.5 million tonnes – slightly more than in August and the total grain exports this month will reach 5.1-5.2 million tonnes of wheat export forecast at the end of the season. RGUand SovEkona”Converge – 38 million tons against 34.8 million tons in 2019/20.

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