MOSCOW, Russia (Reuters) — Russian wheat export prices rose last week due to strong demand from customers concerned about unfavourable weather that has slowed the harvest, SovEcon agriculture analysts said Aug. 19.
Rain is slowing Russia’s grain harvest, adding risks for crops and prompting the Institute for Agricultural Market Studies (IKAR) to downgrade its 2013 forecast for a second time in a week.
IKAR lowered its 2013 forecast to 89.2 million tonnes from 89.7 million because the barley crop was smaller than previously expected. The wheat harvest forecast remained un-changed at 51.9 million tonnes.
On Aug. 14 the country’s agriculture ministry pegged the grain crop at 90 million tonnes, down from a previous estimate of 95 million, due to dry weather in the Volga region.
Russia hopes the wheat crop will be at least 50 million tonnes, up one third from last year’s drought affected harvest.
But some analysts have started to pencil in 49 million to 50 million tonnes because of weather challenges.
The USDA’s estimate of the Russian wheat crop is 54 million tonnes.
As of early this week, Russia had harvested about 36 million tonnes of wheat from about half of its planted area.
Exports since the start of August were 50 percent higher than the same period in July, at 1.4 million tonnes including 1.2 million tonnes of wheat, official data showed.
“Active export demand supports rising prices,” SovEcon analysts said in a note.
Prices for wheat with an 11.5 percent protein content had risen $1 or $2 to $250-$255 per tonne in deep water ports on a freight-on-board basis at the end of last week.
Russian wheat prices were also following European and Chicago markets higher as a recent lack of rainfall in the U.S. Midwest is stressing corn and soybean crops.