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Volga Baikal AGRO News Update on the Wheat Market !!!
Russian wheat is losing competitiveness in the world market due to high prices.
Export prices for Russian wheat (protein 12.5%) for the week rose by $ 9, to $ 258 (FOB, delivery in December), reaching a maximum since January 2015 ($ 269 per ton), follows from the monitoring of the analytical center of JSC Rusagrotrans.
The offer price is about $ 260 per ton.
“However, there is practically no demand from importers at such a price and is closer to $ 256 per ton. The price of Russian wheat is higher than that of competitors,” head of the center Igor Pavensky told Interfax, specifying that the average current price for French wheat has grown by $ 4, to $ 253 per ton, German – by $ 4.75, to $ 254.25 per ton, Ukrainian – by $ 5, to $ 254.5, American – by $ 4, to $ 282 per ton.
Nevertheless, he noted that against the background of rising prices, Russian wheat remains the most competitive in the Egyptian market. However, for deliveries to South Africa it is inferior to Argentina and Australia (by $ 5-15 per ton), while deliveries to South-East Asia it is more expensive than Australian by $ 15 per ton.
As Pavensky said, the wheat exchange market continued to grow against the background of the rush demand from importers and drought in Russia and the Great Plains in the United States. December futures in Chicago at the end of last week strengthened to $ 232.47 per ton (plus 1.2% to the close of the previous week). This is the highest since December 2014. In Paris, quotes rose to $ 244.8 per tonne (1.6%). At the beginning of this week, quotes began to decline due to precipitation in the US wheat belt, by Tuesday prices fell to $ 226 per tonne, despite the deterioration in the state of winter wheat crops in the US.
According to the analytical center, the purchase prices of wheat of the new harvest (4th class, protein 12.5%) in deep-water ports increased by 600 rubles, to 18.8-19 thousand rubles per ton (excluding VAT) against the background of rising FOB prices and low supply. The domestic Russian wheat market continued to grow by 700-1100 rubles per ton in all regions. “Domestic wheat prices are below export parity only in Siberia and the Volga region when supplied to Novorossiysk in December. However, the supply of wheat (protein 12.5%) in these regions is limited. Supplies from the south and from the center have a low profitability,” Pavensky said …
The head of the center also said that the forecast for grain exports in October, taking into account the current export rates, has been increased from 5 million to 5.1 million tons, which is 12% lower than in September, when 5.8 million tons were exported Including wheat will amount to 4.4 million tons of wheat (September – 4.9 million tons), about 0.5 million tons of barley (0.8 million tons) and about 0.2 million tons of corn (82 thousand tons). At the same time, export traffic by rail in October will remain at a record level of 2 million tons (2.25 million tons in September).
As of October 26, about 4.3 million tons have already been exported through ports and railway border crossings.
The analytical center predicts exports in November at 4.5-4.7 million tons, including about 3.6-3.8 million tons of wheat, about 0.5 million tons of barley and about 0.4 million tons of corn.
