The average price for 12.5% Russian wheat has increased by 425 rub to 12,925 rub/mt, as per SovEcon’s price monitoring. This represents the highest wheat price level since July 2022. The key driving force behind the price surge has been strong demand from exporters coupled with a limited supply.
Demand on Russian wheat is rising amid the higher activity of the exporters. As of this Monday, outstanding wheat export sales have seen a week-over-week surge of 2.2 million metric tons (MMT), hitting 5.5 MMT.
It’s likely that farmers are aiming to capitalize on the sales of exporters, which are not adequately covered. While farmers anticipate higher prices and aim to sell lower-quality wheat first, exporters are predominantly seeking 12.0-12.5% protein wheat.
Another factor supporting wheat prices is the slow harvest pace. According to SovEcon’s estimates, only 6% of the acreage was harvested last week, compared to 12% during the same period last year.
Export prices for Russian wheat have remained largely stable. Over the last week, average Russian FOB prices dropped by $1 to $231.5, reflecting the strengthening of the ruble.
The active increase in Russian domestic wheat prices may limit exporters’ ability to exert pressure on the global wheat market.
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