IKAR in Mass and Industry Media

Russian grain markets uneven, analysts divided

Reuters

MOSCOW, July 20 (Reuters) - Russian grain markets were rather uneven last week, and analysts were divided about their general trend.

The Institute for Agricultural Market Studies (IKAR) said new harvest grain prices remained largely unchanged last week in spite of an increase of FOB and futures prices both in the United States and the European Union.

"Exporters' activity remains quite low compared to the same period of last season, when the country harvested a bumper crop (of 108.1 million tonnes)," IKAR said.

"But some exporters buy grain from farmers at prices higher than indicated by the market when they need to honour earlier signed export contracts."

SovEcon agricultural market analysts said that prices in most regions kept declining due to seasonal factors, while in North Caucasus prices for most new crop grains rose notably.

"Russia's main export region has reacted rapidly to a $5-$10 per tonne rise on both cash and futures markets," it said.

SovEcon estimates milling wheat export prices at $168-$175 per tonne FOB Novorossiisk, as exporters' bid prices for fourth-grade wheat rose to 4,600-4,800 roubles ($145.2-$151.5) per tonne CPT Novorossiisk last week.

IKAR estimates the price of ordinary milling wheat at $165-170 per tonne, FOB Novorossiisk, and feed barley price at $125-130 per tonne, FOB small Azov sea ports.

SovEcon said that average grain offer prices in North Caucasus added 100-200 roubles per tonne, while in other parts of European Russia prices lost 100-200 roubles.

"Domestic prices are at new shockingly low price levels. High quality milling wheat bid prices in Southern Russia are $140-$145 per tonne, ordinary wheat $130-$135 per tonne and feed wheat around $95 per tonne," IKAR said.

It estimated feed barley start-up price at a strikingly low level of $75 per tonne.

SovEcon expects a stronger bearish trend in most regions as the harvesting campaign progresses. Even in the south, where the price bottom appears to have been passed, a stable upwards trend appears unlikely, it said.

"Much will depend on the state (grain purchase) interventions, which may start in some two weeks," SovEcon said.

The harvesting is moving north-eastwards from the south of European Russia. Heat continues to damage the crop as the campaign progresses, IKAR said.

The harvesting in the Central Black Soil region started 10-14 days earlier than usually due to extremely hot weather and early crop ripening.

IKAR expects to have a clearer idea of the actual effect of the heat on grain yields and quality later this week.

SUNOIL, SUNSEEDS DECLINE

Russian crude sunoil export prices declined last week to $680 per tonne, FOB Novorossiisk, while domestic sunseed purchase prices declined to $270 per tonne with weak trade in spite of the support from international prices, IKAR said.

SovEcon said average sunseed prices lost 100 roubles per tonne last week and crude sunoil prices 500 roubles per tonne.

The start-up prices for rapeseeds are ranging between 7,000-7,200 roubles per tonne compared to 12,000 roubles a year ago, as some crushers in southern Russian start new crop winter rapeseed processing, IKAR said.

The new harvest rapeseed oil prices are estimated to be 20-21 roubles per kilo, it said.

30.07.09

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