Russian wheat prices continue to rise. This has even reached the highest point in 3 years. Because the ruble has improved its value slightly, arable farmers decide to offer more wheat. Buyers eagerly accept this.
The average price for wheat in Russia at the beginning of April was about $213 per tonne. This has now risen to $215 per tonne. This means it is creeping further towards the $220 mark. This was previously cited as a magical limit. Analysts expect that new increases are feasible and exports will not suffer.
More exports
According to agricultural research agency SovEcon, the Russian wheat price has not been this high in 3 years. That's what it says to news site RT. Up to April 23, arable farmers have sold 1,19 million tonnes of wheat this month, according to new export figures. The entire season so far has produced almost 33 million tons of wheat, an increase of 43% compared to the previous season.
Russian farmers and grain exporters are in great demand for their product. In addition to exports, there is also domestic demand. There is a demand for wheat, especially in the southern Russian areas. One of the reasons is that more shipping traffic is possible now that spring has arrived. In addition, the exchange rate of the ruble against the dollar has recovered slightly.
Ruble rate
The low price makes wheat very expensive attractive for buyers. However, according to analysts, it has also caused arable farmers to temporarily stop selling. Some companies are even said to have terminated current contracts. A price increase means more sales.
Russian wheat is doing well on average. However, spring is much later and it is cold. There is currently sufficient moisture available for crop development. In the United States (US), winter wheat crops are doing much worse. It remains extremely dry there and rain only brings local relief.
In addition, frost is expected again. However, it is not cold enough to damage the wheat. In the northern Midwest, crop farmers are dealing with flooding. Spring is very difficult in the US.
Wheat prices
As a result, wheat prices on the CBoT are rising. Week 17 started at $169,57 per tonne. About 2 days later the price had climbed to $178,67 per tonne. The May contract will also close on Thursday, April 26. The Matif also made a small profit, closing at €165,25 per tonne on April 25. That level will be maintained on Thursday, April 26.
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Smaller harvest
Prices for Russian wheat from the new harvest (delivery in August) are at a lower level. Wheat with 12,5% protein is offered for $198 per ton FOB and for 10,5% protein it is $188 per ton. The final stock of old harvest for Russia is estimated to be slightly higher (compared to 2017) but lower than previously thought. Together with lower production, smaller production is expected in 2018/2019. Current harvest estimates are 74,8 million tons, compared to 85 million tons in the current season