Volga Baikal AGRO NEWS Update on the Russian Wheat Exports !!!

Volga Baikal AGRO NEWS Update on the Russian Wheat Exports !!!

Export prices for wheat go down.

Importers are not ready for prices above $ 300 per ton.

According to the Institute for Agricultural Market Studies (IKAR), by the end of last week export prices for Russian wheat with 12.5% ​​protein decreased by $ 2 to $ 296 / t (FOB Novorossiysk), Reuters reported. “Numerous attempts to raise the price above $ 300 [per ton] have failed, meeting resistance from buyers,” the agency quotes the general director of IKAR Dmitry Rylko. According to Refinitiv, wheat of this class fell from $ 296 / ton at the beginning of the week to $ 295 / ton at the end, while on Thursday the price was at the level of $ 300 / ton.

“Export prices for grain in the first half of last week increased, but then the growth stopped. Such dynamics is associated with two factors: active sales on the world market in the second half of last week and cautious purchases from importers who are not ready for such a price level, commented to Agroinvestor  a Director of the analytical center SovEcon Andrey Sizov. According to him, the story with the tender from Turkey last week was indicative: the buyer bought a much smaller volume of grain than planned, despite the fact that sellers have greatly reduced prices. At the tender on January 22, the Turkish Grain Agency purchased only 95 thousand tons of milling wheat with 12.5% ​​protein with shipment on January 29 – February 26. Initially, it was reported that 400 thousand tons were contracted, but on Friday evening, amid news of a drop in quotations in Chicago, Turkey refused the ten most expensive contracts.

Domestic grain prices are growing, and quite actively, continues Sizov. Over the past week, they increased by 200-300 rubles per ton.  “We think this is a good opportunity to sell wheat,” the expert noted. According to Rosstat, by the end of 2020, grain balances at agricultural enterprises were at the level of 24.5 million tons, which is 9.4% more than a year earlier. Including wheat stocks were estimated at 13.4 million tons – 21.2% higher than a year earlier.

Export prices for grain have grown by 20% or $ 50 per ton since the information about the introduction of the export duty appeared, the price increase was gradual and, in fact, today it has almost won back the duty, says the director of the analytics department of the Russian Grain Union (RZS) Elena Tyurina. “Now the price for milling wheat at EXW is $ 75 per tonne lower than the FOB price. Before the introduction of the duty, the difference was $ 20 per ton, she compares. “Of course, the change in prices is connected with the expectation of the introduction of the duty – exporters have included it in the export price in advance”.

At the same time, the rush demand for Russian wheat remains, says Tyurina. “From the beginning of the month up to January 21, the export of wheat from Russia amounted to 2.6 million tons, daily shipments for the past period were at the level of 125 thousand tons, which is almost twice as much as in January 2020. Realizing that changes in the market are possible soon, importers are increasing their purchases, – she comments. “Exporters, in turn, find it profitable to actively sell grain, since the intrigue of which companies will still receive a supply quota after February 15 has not yet been disclosed.”

SovEkon, with reference to the FCS data, it clarifies that from the beginning of the season to January 21, grain exports from Russia reached 30.9 million tons, which is 22% more than in the same period of the last marketing year. Including the export of wheat amounted to 26.5 million tons – 22% more than last year, barley – 3.36 million tons (plus 52%), corn – just over 1 million tons (16% less). According to the forecast of analysts of the center, in January shipments of wheat abroad will reach 3.2-3.5 million tons.

Source: Agroinvestor.ru