SovEcon reports largest drop in Russian wheat prices since September 2023

Ruble prices declined amid unfavorable global market conditions and an improved outlook for the Russian wheat crop.

12.5% wheat bids in deep-sea ports decreased from June to July by 16% to 15,250 rub/mt (excluding VAT), as per SovEcon estimate. This marks the most significant drop in prices at least since September 2023. Ruble prices declined amid unfavorable global market conditions and an improved outlook for the Russian wheat crop.

The decline in global market prices was a primary source of pressure on ruble prices. Since the beginning of summer, the September wheat contract on the Matif exchange fell by 15% to $239/mt.

The strengthening of the ruble also contributed to the decrease in wheat prices in Russian ports. At the beginning of July, the exchange rate was 88.2 rub per dollar, compared to 90.2 rub at the beginning of June.

Another factor influencing prices was the improved outlook for the Russian wheat crop. In July, SovEcon raised its wheat production estimate by 1.7 MMT to 33.2 MMT for the South and by 3.4 MMT to 84.1 MMT for Russia overall.

In the short term, the ruble market will remain under pressure, but the potential for further declines will largely be determined by further changes in new Russian crop estimates.

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