Russian wheat prices drop to June lows – SovEcon

Decline in wheat prices continues amid the falling demand.

During the week ending September 20, the average price for class 4 wheat in the European part of Russia dropped by 400 rubles to 12,000 rubles, as per SovEcon price monitoring. Wheat had last fallen to such levels at the end of June. Decline in wheat prices continues amid the falling demand.

Domestic demand for wheat remains weak as flour mills and livestock breeders have sufficient wheat stocks.

Exporters are also reducing their wheat purchases amid declining sales. As of September 26, the amount of outstanding Russian wheat sales had dropped to 4.1 million metric tons (MMT) from 6.1 MMT a month prior.

Export pace could be impacted by the attempts of the Ministry of Agriculture to regulate minimum export prices. At the last GASC tender, Russian wheat was offered for no less than $270 FOB, corresponding to the “price floor” reportedly set by the Russian Ministry of Agriculture for wheat. Consequently, Russian offers were overshadowed by more competitive prices from Romanian exporters.

Meanwhile, wheat supply remains high amid a good crop. SovEcon estimates Russian wheat crop in 2023/24 at 91.6 MMT, which is 11% higher than average.

In the short term, we expect further weakening of ruble prices, which may increase marginality for the exporters. However, we do not anticipate a significant increase in exports, as the infrastructural constraints remain the main limiting factor.

Follow the Black Sea grain market

Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and Kazakhstan

Try for free

More Articles for You

Russian wheat exports in November drop to season low – SovEcon

Wheat sales slowed due to stormy weather in the Black Sea.

Russian wheat crop to drop in 2024 – SovEcon

The yield in 2024 is expected to move lower on expected average 2024 crop conditions and decline in agriculture inputs application.

SovEcon: Russian wheat market bottomed out

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

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 cut Russian wheat export forecast for the first time this season

The estimate was revised amid sluggish wheat sales and anticipated purchases for the intervention fund.