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Russian wheat export prices may fall in October - analysts

Reuters

MOSCOW, Oct 1 (Reuters) - Russian wheat export prices, which have been rising since June, are expected to level out or fall in October because of falling demand from large traders, analysts said on Monday.

The prices have been rising due to worsening crop conditions and forecasts, forcing Russia to give up market share to other global suppliers, including France.

Egypt, the world's largest wheat importer, bought 300,000 tonnes of Romanian and French wheat at its tender last week. There were no purchases of wheat from Russia, which had been a major supplier in August.

"The market in Russia's south region looks quite overheated in terms of export prices. We think that prices are likely to become stable or decrease, as contracts (of large traders) are closed," SovEcon agricultural analysts said.

Russia's grain export will fall in October to 2.5 million tonnes but will be supported by maize (corn) and rice shipping, the Institute for Agricultural Market Studies (IKAR) said.

October prices for fourth-grade milling wheat in Black Sea deep-water ports were quoted at 10,900 roubles ($350) per tonne delivered to port, down from last week's 11,200-11,400 roubles, SovEcon said in a note.

Last week, prices for fourth-grade milling wheat in deep-water ports rose 1,300-1,400 roubles per tonne. In shallow-water ports prices rose to 10,200 roubles per tonne last week, from 9,600 roubles per tonne, on a carriage-paid-to (CPT) basis.

Russia, one the world's leading wheat exporters, was hit by a drought this year, which is expected to decrease its 2012/13 grain harvest by a quarter to 70 million tonnes.

"Grain supply (in Russia) remains at a low level. Domestic consumers, forced to increase prices almost everyday, continue to stockpile grain," SovEcon added.

The International Grains Council on Friday cut its forecast for Russia's wheat crop, which has been hurt by a widespread drought, by 2 million tonnes from last month's forecast to 39 million tonnes.

DOMESTIC PRICES JUMP

Russia's domestic prices jumped last week to reach the highest level since April 2008, SovEcon said.

Russia's average domestic EXW (ex-silo) prices for third-grade and fourth-grade milling wheat were up 875 roubles at 9,625 roubles per tonne. During the previous week it added 300 roubles per tonne.

Prices for fifth-grade milling wheat increased 725 roubles to 9,075 roubles per tonne last week, SovEcon said.

Chicago wheat futures jumped 5.5 percent on Friday, the strongest gain in three months, as the U.S. Department of Agriculture said Sept. 1 stocks of the grain declined year-on-year, counter to trade expectations of an increase.

For sunseeds, the price index for the new harvest fell by 33 roubles to 17,600 roubles per tonne, according to IKAR.

SovEcon said October target prices for sunseeds were quoted at 18,000 roubles per tonne in North Caucasus, on a CPT basis, down from last week's 18,625 roubles per tonne. During last week prices rose 275 roubles, while some large buyers decreased prices by 500 roubles per tonne towards the end of the week.

The crude sunoil price index fell to 41,600 roubles per tonne, down 300 roubles, and rose in dollar terms to $1,334 per tonne from $1,327 per tonne, IKAR said.

SovEcon pegged domestic prices at 41,675 roubles per tonne, down 175 roubles, while export prices were seen at $1,180-1,200 per tonne, up from $1,200-1,220 per tonne.

IKAR pegged white sugar prices in the south of Russia at 20,600 roubles per tonne, down 200 roubles. In dollar terms it rose to $660 per tonne, up $2.

01.10.12

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