Russian wheat prices have strengthened – SovEcon

A surge in wheat prices is supported by increased demand in both the external and domestic markets.

Wheat prices in the European part of Russia have strengthened, SovEcon said in its report. 3rd grade wheat prices increased by 50 rub to 12,550 rub/MT, while 4th grade wheat remained at 10,975 rub/MT, and 5th grade wheat went up by 250 rub to 8,725 rub/MT. A surge in wheat bids is supported by increased demand in both the external and domestic markets.

Export sales of Russian wheat saw an uptick in the past week. The amount of outstanding sales of Russian wheat as of last Friday stood at 3.4 MMT, a jump from 1.1 MMT the previous week.

Additionally, the Egyptian company GASC purchased 540,000 metric tons of Russian wheat last week, with prices ranging between $255 and $265/MT FOB.

In the domestic market, high demand from millers and livestock farms is bolstering prices. Consumers are likely trying to replenish stocks ahead of the long New Year holidays.

This week, Russia started intervention procurements of wheat. In the first two days, 33,000 tons were acquired. The Ministry of Agriculture aims to procure up to 2 MMT of grain in total.

The strengthening in wheat prices might slightly lower exporters’ margins, yet the current profitability of trade operations remains substantial and is not likely to significantly affect the sales pace.

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