SovEcon: Russian grain market to bottom out in coming weeks

Russian wheat prices may reverse after a three-month decline amid higher demand and lower supply.

SovEcon anticipates stabilization in the Russian wheat market, the think-tank said in its new report. In the last week, prices for fourth-class wheat have decreased by 75 rub, compared to the 150-450 rub weekly drop since mid-August. Russian wheat prices may reverse after a three-month decline amid higher demand and lower supply.

In the past three months, prices for fourth-class wheat in Russia have fallen by 21% to 11,075 rub/MT. 

Demand for Russian wheat among exporters is increasing amid a resurgence in export sales. As of Nov. 14, the amount of outstanding wheat sales reached 2.4 MMT, up from 1.9 MMT a month earlier.

Domestic sales of Russian wheat have picked up. In recent weeks, millers were actively purchasing wheat in the non-southern regions.

The wheat supply is diminishing as the harvest season concludes. Farmers are less actively selling grain, having met their financial needs.

An expected increase in domestic prices, coupled with the strengthening of the ruble, may negatively impact exporters’ margins and could limit Russian wheat exports in the coming months.

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