SovEcon: Russian wheat market bottomed out

After three months of decline, the market is bottoming out amid increasing demand and shrinking supply.

Andrey Sizov 21.11.2023

The Russian wheat market probably bottomed out last week, SovEcon said in its weekly market report. After three months of decline, the market is bottoming out amid increasing demand and shrinking supply.

Last week, prices for 3rd-grade wheat (13%+ protein) increased by 50 rub to 12,500 rub/MT, while 4th-grade wheat (12-12.5%) decreased by 50 rub to 11,025 rub/MT. Prior to this, prices had generally been declining since mid-August, losing 12% and 22%, respectively, over this period.

Demand for Russian wheat among exporters is growing due to a recovery in export sales. As of Nov. 21, the amount of outstanding sales of wheat reached 2.8 MMT, up from 2.0 MMT a month earlier.

Domestic sales of Russian wheat have increased in the Central and Volga regions, with millers constituting a significant portion of the buyers.

The wheat supply is decreasing with the conclusion of the harvest. Farmers have partially covered their financial needs and are now primarily engaged in harvesting late crops and sowing winter crops.

The stabilization of the ruble market and noticeable growth in dollar terms will restrain Russian exports in the near future. Exports may also be limited shortly by the seasonal worsening of weather in the Black Sea region.