As of October 25th, the volume of Russian outstanding wheat sales has decreased to 1.6 MMT. This marks the lowest level since the beginning of June, as per SovEcon estimate. Sales continue to decline amid government recommendations against selling wheat at current global market prices.
Market participants tie the sales decline to recommendations from the Russian Ministry of Agriculture. Media had previously reported a “price threshold” of $260-270/mt FOB established by the ministry. Although this threshold may have been slightly lowered in recent weeks, it apparently still remains above market prices.
Amidst falling sales, wheat prices have also declined. By the end of the previous week, the price of Russian 12.5% wheat fell by $7 to $232/mt FOB, according to SovEcon’s price monitoring.
SovEcon estimates October wheat exports at 4.2 MMT, down from 4.5 MMT a year earlier.
The sluggish pace of sales and the deceleration of Russian exports aren’t fully accounted for in the global market, which may provide support for prices in the near future.
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