The Russian wheat market witnesses further price growth. On average, export prices for Russian wheat closed the week up another $3-4/MT FOB in both deep-water and smaller ports. So, they reached a four-year high, reports UkrAgroConsult. The growth drivers include mostly domestic factors:
- dwindling grain inventories. According to the Russian Statistics Service, farming, procuring and processing entities held a combined 38.5 MMT of grain as of January 1, or 16% less than last year.
- this trend provoked a substantial rise in domestic prices. Rouble-denominated prices for milling wheat have hit an all-time high, while those in dollar terms were the highest since July 2014. Growers are holding back sales in view of shrinking stocks and constantly rising prices.
- the above-mentioned was aggravated by a strike of motor carriers and disruption of some grain deliveries to ports.
The current situation in the domestic grain market has made Russian wheat uncompetitive in the export market. Russian wheat price in the export market has become the highest among all suppliers of this commodity.
That substantial rise in domestic prices even despite a strengthening rouble brings additional uncertainty to the market. Grain stocks in the country, though lower than a year ago, are higher than in previous periods.
More detailed information on the latest trends in grain exports, supply and demand balances with breakdown by crop, price behavior, crop conditions and progress in harvesting/planting in the countries of Black Sea Region is available to subscribers for weekly market report "Black Sea Grain" by UkrAgroConsult.
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