Russia’s wheat prices reverse, will Black Sea dryness help wheat bulls?

Last week, Russian wheat prices started to ease but dryness in the Black Sea should remain on the markets’ radar

Last week, Russian wheat prices started to reverse. 12.5% wheat closed the week at $236.5/mt FOB deep-sea ports, +$8.5 week on week but a few dollars below the values seen at the beginning of the week. Prices were going down following global benchmarks and increased competition with other origins.

Wheat in Chicago lost almost 5% and French wheat was down 1% week on week. France returned to GASC tenders with offers several dollars above Russia (C&F Alexandria) but this spread could narrow further soon. French exports are lagging badly and Algeria is expected to ease bug damage specifications allowing Russia and Ukraine to participate in its wheat tenders. This could encourage French sellers to become more aggressive in non-Algerian markets.

One of the remaining bullish stories is the dry weather in the Black Sea. Ukraine is starting the winter planting campaign and Russia has sown more than half of the area already. Many fields are dry with 0 moisture in the topsoil. September was abnormally dry, the majority of wheat regions around the Black Sea received only 20-40% of normal precipitation or lower.

Things are improving for Ukraine. The country is expected to receive 15-30 mm of rains this week which could be a game-changer for the 2021 wheat crop. However, at this stage rains are expected to move to Russia from Ukraine just marginally. Only parts of the Russian South are expected to get 10-15 mm of precipitation while other winter wheat regions are predicted to remain dry. We would be watching this closely as rains are needed very badly, indeed, in the next few weeks.

Follow the Black Sea grain market

Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and Kazakhstan

Try for free

More Articles for You

Weekly round-up of Black Sea grain market – May 23

Russian wheat exports to tumble to 0.8 mmt in May, Ukraine is seeding corn fast despite the war

Weekly round-up of Black Sea grain market – May 16

Russian wheat exports to halve in May, no signs of de-escalation

Weekly round-up of Black Sea grain market – May 9

The weekly review of key Black Sea wheat and corn events

SovEcon ups Russian wheat crop forecast; Russia and Ukraine could export 60+ mmt of wheat in 2022/23

Russia could harvest 87 mmt of wheat in 2022; Russia + Ukraine 2022/23 wheat exports to reach 60+ mmt

SovEcon: 2022/23 Russian wheat crop and exports could be record-high

Excellent weather conditions and good inputs availability could lead to a record-high Russian wheat crop

Ukrainian 2022 grain crop to decline substantially

New Ukrainian wheat crop could decline by 19%, corn – by 34%, says SovEcon