Andrey Sizov
06.08.2024
As of July 1, 2024, wheat stocks reached 20.3 million metric tons (MMT), exceeding last year’s numbers by 21%, SovEcon said in a report. The stocks hit a new record-high amid an early start of a harvesting campaign.
Due to weather anomalies over the past several months, the harvesting campaign began much earlier than usual. By early July, about 6.9 MMT of wheat were harvested, compared to 0.2 MMT a year earlier.
Without the new crop, Russian wheat stocks are below last year’s figures. According to Rosstat, wheat stocks, excluding the new crop, totaled 13.4 MMT, down from 16.6 MMT last year. Rosstat’s data does not include figures for small companies.
SovEcon estimates wheat production for the new season at 84.7 MMT, down from 92.8 MMT last year and an average of 86.7 MMT over the past five years.
The high supply of wheat at the start of the new season led to a drop in prices. From early June to mid-July, wheat prices in Russia’s deep-sea ports decreased by 3,350 rub to 14,750 rub.
In recent weeks, the wheat market rebounded amid reduced supply in the South. By early August, prices in the ports had risen by 1,000 rub to 15,750 rub.
We remain cautious about the stability of this price increase, as wheat supply will remain at historically high levels, compounded by the challenging financial situation of agricultural producers and prohibitive interest rates.
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