Russia’s wheat prices higher, the market talks about low stocks

12.5% wheat prices in Russian deep-sea ports rose by $4 to $274/mt. The Black Sea follows the rest of the world where prices continue to rise reflecting the tightness of 2020/21 global grain S&D.

Andrey Sizov 10.05.2021

Last week, 12.5% wheat prices in Russian deep-sea ports rose by $4 to $274/mt. The Black Sea follows the rest of the world where prices continue to rise reflecting the tightness of 2020/21 global grain S&D.

Wheat in Chicago and Paris rose around 4-6%. Corn gained 9%.

Brazil’s weather remains a disaster during the key period for safrinha corn which accounts for around ¾ of the total country’s crop. All regions were dry last week with an exception of small parts of Mato Grosso. Almost 0 rains remain in the forecast. Local analysts are talking about 90-98 MMT crop while USDA predicted 109 MMT in April’s WASDE.

N.American spring wheat regions also were mostly dry. Some rains are in the forecast only for the second half of May. France has been slightly drier than needed.

Weather in the Black Sea remains favorable for the new crop. The Center and the Volga Valley received 10-20 mm of precipitation during the week. The South was a bit dry with around 5 mm of rain. This week is predicted to be rainy for wheat regions with 15-30 mm of precipitation. Russian analyst IKAR cut its wheat crop number from 79.5 MMT to 79 MMT. SovEcon’s April forecast is 80.7 MMT.

The market talks about “unexpectedly low wheat stocks in Russia”. This in not fully true. Off-farm April 1 wheat stocks were reported by Russian Rosstat at 5.3 MMT (-27% YOY, a record low for recent years). But this was offset by high on-farm stock number, 8.5 MMT (+38%). The total was slightly above the previous year – 13.8 MMT vs 13.4 MMT.