Last week Russia’s outstanding wheat export sales hit 2.9 million metric tons (MMT), according to data from the National Commodity Exchange (NCE) processed by SovEcon. This is the highest number since the reporting system was introduced in 2021. The increase in sales is driven by strong demand for Russian wheat amid record-high harvest.
Russian wheat has regained its competitive edge amid rally in CBOT and Euronext in recent weeks. The spread between Euronext French wheat prices and Black Sea rose to around $17-18 from $0-5 in January. As a result, demand from importers rose substantially.
In 2022 Russia harvested record-high wheat crop of 104.4 MMT, compared to 76.0 MMT a year earlier.
Wheat sales reporting system was introduced in 2021 in order to calculate weekly floating tax rates on grain exports. Traders must report data on deals they make, based on which the export tax and indicative price are calculated.
This week, the volume of outstanding sales decreased to 2.3 million tons but it’s still a high volume for this time of the season.
SovEcon estimates that exports in February will reach 3.4 to 3.9 MMT, compared to a five-year average of 2.5 MMT. Fast Russian exports put significant pressure on the global wheat market.
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