Ruble wheat prices rise rapidly threatening exports

Russia’s domestic wheat market is rising fast, supported by demand from exporters and domestic buyers as well as worsening crop outlook. This could negatively affect wheat exports pace during the next few months from the top world wheat exporter.

Russia’s domestic wheat market is rising fast, supported by demand from exporters and domestic buyers as well as worsening crop outlook. This could negatively affect wheat exports pace during the next few months from the top world wheat exporter.

Last week, SovEcon price index for 4th grade food wheat (12-12.5% prot.) rose 550 rub to 13,375 rub/mt (USDRUB = 73.3). Prices were going up rapidly all over the country, driven by strong demand from exporters and domestic buyers.

Many sellers default on existing contracts leading to more panic buying. It looks like some domestic processors after the introduction of the export tax were not prepared for such prices at the start of the season. 4th grade is the major export grade.

Estimates of the new wheat crop were cut sharply in recent weeks after Rosstat released unexpectedly low winter wheat area number. Disappointing yields in the Center and the Volga Valley also contributed to lower crop estimates. SovEcon cut Russian wheat crop estimate from 82.3 mmt to 76.4 mmt. USDA’s July estimate was 85 mmt (ex. Crimea with 0.7-0.8 mmt) and probably will be cut substantially this week in the new WASDE report.

Rising ruble prices, strong ruble, competition with other origins and unpredictable weekly-adjusted “floating” wheat export tax could mean sluggish exports during next few months. In August exports are tentatively estimated at 4-4.5 mmt compared to 4.7 mmt on average for the month.

Follow the Black Sea grain market

Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and Kazakhstan

Try for free

More Articles for You

Siberia saves new Russian wheat crop

Russian farmers have harvest 71 mmt of wheat in bunker weight and Siberian yields are great

Russian wheat prices push higher again supported by export tax

Last week, 12.5% wheat prices in deep-sea Russian ports rose $2 to $303/mt, the new seven years high. Russian wheat continues to lose its competitive edge but hardly predictable export tax doesn’t allow exporters to lower prices.

Russian wheat prices hit 7 years high

Prices for Russian wheat with 12.5% ​​protein at the end of last week have strengthened by $3 to $301/mt FOB deep-water ports. This is the highest price level since April 2014.

Russian wheat ruble prices lower, harvest pressure at last?

Last week, domestic wheat prices dropped in Russia by 1.5%, which was the fist decline after several weeks of rapid growth.

Russian wheat prices higher but buyers started to lower ruble bids

Last week, 12.5% wheat prices in Russian deep-sea ports rallied further, by $13 to $299/mt supported by firmer ruble prices. Earlier rally in the global benchmarks also helped. Closer to the end of the week many buyers started to lower bids hoping that the ruble market could reverse soon.

Black Sea wheat price rallied after WASDE

Russia’s domestic wheat market is rising fast, supported by demand from exporters and domestic buyers as well as worsening crop outlook. This could negatively affect wheat exports pace during the next few months from the top world wheat exporter.