Wheat bids in Russian ports are tanking as traders are reflecting a second higher tax (50 eur/mt from March 1) in prices. Average 12.5% bids in deep-sea ports fell more than 10% to 14,850 rub/mt (USDRUB 73.6) last week, as per SovEcon assessment.
Farmers are selling wheat more and more aggressively in the domestic market losing hope to see a reversal in the current downtrend. Grain demand is weak, exporters are busy shipping the grain and delivering it to ports ahead of taxes. Looks like the majority of them well-covered. Domestic processors are buying minimum volumes expecting the market to move even lower.
The market decline could stop shortly or continue if farmers remain aggressive sellers. Current wheat bids in ports have already reflected the higher 50 eur/mt tax. We also expect to see a recovery in traders’ demand shortly, especially if our assumption about higher global prices turns out to be true.
SovEcon expects domestic wheat prices to move lower short term but believes that the bottom could be close.
Russia’s 12.5% FOB prices were down $4 to $281/mt last week.
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