MOSCOW, July 7 (Reuters) – The rally in Russian wheat prices stalled last week as harvesting gathered pace, slightly easing concerns over wheat quality, which was still mixed, analysts and a trader said on Monday.
Rains in Russia, a major global wheat exporter, had delayed the harvesting campaign, but favourable weather last week added to supply for already agreed forward deals.
“Prices have ground to a halt,” a Moscow-based trader said. “The harvesting is gathering pace and supplies are rising.” Prices may decline slightly this week as Russia’s central regions start harvesting, he added.
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According to Dmitry Rylko, the head of IKAR, one of the leading Russian consultancies in the sector, data on wheat quality is mixed and it’s too early to comment on it.
The trader said the quality was okay in general, excluding Rostov where the percent of wheat graded fourth class is higher and third-class less than a year ago.
Russia, which exports wheat via the Black Sea mainly to customers in North Africa and the Middle East, has so far harvested more than 5.5 million tonnes of wheat.
According to the trader and IKAR, Russian farmers have sold about 5 million tonnes in forward deals.
The world’s largest wheat importer is Egypt. Its state grain buyer, the General Authority for Supply Commodities (GASC), said last week it bought 240,000 tonnes of Romanian and Russian wheat for shipment Aug. 11-20.
Russian prices for new wheat crop with 12.5 percent protein content were steady with the previous week at $250-$255 per tonne at the end of last week on a free-on-board (FOB) basis in the Black Sea, SovEcon agriculture consultancy said.
IKAR quoted FOB prices for the same protein content at $251 per tonne, down $1 from a week earlier.
During the 2013-14 marketing year, which ended on June 30, Russia exported 26 million tonnes of grain, including 18.3 million tonnes of wheat, 4.1 million tonnes of corn and 2.7 million tonnes of barley, IKAR added.
This year the Crimea region, annexed by Russia from Ukraine in early 2014, could add to its exportable surplus. The region is ready to export between 400,000 and 500,000 tonnes of grain this year, or about a half of its expected harvest, the regional agriculture minister, Nikolai Polyushkin, was quoted as saying by local media last week.
The Krasnodar region, Russia’s major region for wheat exports via the Black Sea which is also known as Kuban, plans to harvest nine million tonnes of grain this year, excluding corn and rice, according to local TV quoted by Russia’s agriculture ministry on its website last week.
That compares with a figure of eight million tonnes from the region last year by the end of the harvest in mid-July.
SovEcon also said Russian sunflower seed prices declined by 550 roubles to 13,350 roubles ($390 US) a tonne at the end of last week, while export prices for sunflower oil were flat at $860-$870 a tonne on an FOB basis in the Black Sea.
IKAR pegged sunflower seed prices at 13,475 roubles per tonne.
