Wheat prices in Russia experienced a decline during the previous week, with the impending arrival of the new crop contributing to this decrease.
Russian Wheat Prices in a Fluctuating Market
In the bustling heart of Moscow, wheat export prices witnessed a dip in the recent week, as the new harvest began to emerge, with no conclusive evidence of extensive crop damage due to earlier frosts, according to experts.
The going rate for Russian wheat with 12.5% protein content, scheduled for delivery late March to early April, dropped by $2 to $247 per metric ton in comparison to the previous week, reported Dmitry Rylko, head of the IKAR consultancy.
The Sovecon consultancy estimated the price for the same Russian wheat variety at between $249 and $250 per ton FOB for mid-week, as compared to $249-$251 last week. New crop offers are approximately $234-235 per ton.
Sovecon increased its forecast for April wheat exports by 0.1 million tons, setting it at 2.3 million tons. This figure pales in comparison to the 4.6 million tons exported in April 2024. Domestic market activity is predicted to remain sluggish during the initial half of May, due to the forthcoming May Day and Victory Day holidays on May 1-2 and May 8-9 respectively.
Despite IKAR's unchanged export estimates of 2.1 million tons for April wheat exports, Rusagrotrans rail carrier upped its April export estimate to 2.3 million tons, fueled by increased demand from Turkey and Iran. Turkey shipped 355,000 tons in April, nearly double that of March, while Iran sent 270,000 tons (nearly a 1.9-fold increase). The anticipated May exports are approximately 1.9 million tons.
Last week, Sovecon upgraded its forecast for Russia's wheat exports for the 2024/2025 and 2025/26 seasons, attributing this decision to the current circumstances that do not anticipate a significant increase in exports. Experts like IKAR and Sovecon analysts remain skeptical that the short-term frosts in Russia's European region were capable of inflicting significant crop damage. The winter wheat regions are poised to stay dry this week, Sovecon analysts mentioned.
The primary challenges for Russian wheat have been factors such as drought and a strengthening ruble, among others[3][4]. The emphasis continues to be on weather conditions and other market dynamics, rather than frost damage, for the current season's harvest.
- Ira, a local trader in the food-and-drink industry, closely monitored the trading market for Russian wheat, considering it a crucial aspect of her business.
- The dip in wheat export prices raised questions about the impact on Ira's lifestyle and profits, as she relied on steady supplies for her business.
- Financial analysts, like those at Sovecon and IKAR, estimated that the export of Russian wheat would remain robust, suggesting a promising outlook for the industry.
- With the anticipated April wheat exports surpassing the previous year's figures, Ira felt reassured about the supply of wheat for her business in the near future.
- The increased demand from Turkey and Iran further boosted Rusagrotrans's export estimates, indicating a positive trend for the food-and-drink business in Russia.
- Despite the initial concerns about frost damage, experts in the industry remained optimistic about the prospects of the next wheat harvest, as they anticipated favorable weather conditions in the coming weeks.
