Andrey Sizov
20.03.2024
Last week, prices for Russian wheat with 12.5% protein increased by $2 to $201-204 per metric ton (MT) FOB, as per SovEcon estimate. Since the start of January, Russian wheat prices had been continuously declining, losing $44. Prices rose amid the recovery of Russian wheat competitiveness and a resurgence of demand.
Russian wheat is highly competitive compared to European wheat. Last week, French wheat with 11% protein was offered at $211/MT FOB, which is $8.5 more expensive than Russian wheat. In January, European wheat was $1.5 cheaper than Russian wheat.
Since the beginning of March, futures prices for European wheat have surged from $208/MT to $218/MT.
Sales of Russian wheat are increasing amid the recovery of demand from importers. The amount of outstanding sales of Russian wheat as of March 19 totaled 2.7 MMT, up from 2.0 MMT in January.
Some buyers have yet to cover their needs for the coming months. Harvesting of the new crop in North Africa will start in 1-2 months.
The probability that Russian wheat export prices have bottomed out seems high to us. However, this does not yet indicate a solid upward trend. The growth of global futures prices remains unstable amid high stocks in the EU and the USA.
