Exchange rates currently determine where traders buy their wheat. The EU benefits from a weaker euro, while the US and Russia are temporarily outperformed by a stronger dollar and ruble.
Russian market consultancy SovEcon notes that Russian wheat prices are falling for the first time since August. Wheat prices fell last week to the equivalent of €174 to €177 per tonne. This means prices are almost €3 lower than the previous week.
This isn't terribly shocking, but it is an indication that the price recovery is faltering. The decline is attributed to a stronger ruble against the dollar and somewhat weaker demand from Russia's northern regions.
Russian exporters will further lower their purchase prices, SovEcon expects. They are doing this to improve their margins, and there are currently few gains to be made on the sales side. Export prices in dollars remain stable at just under €200 per tonne. They do see room for improvement on the purchasing side, as farmers need money and therefore appear willing to accept lower prices.
The weaker euro has stabilized prices on the Paris futures market. The December contract has been trading steadily at €187,75 per tonne since Friday. Prices are falling in Chicago, however. On the CBoT, a price level of $5 is slowly but surely approaching. The exchange closed on Tuesday at $5,06¾ per bushel. Three weeks ago, the price was still at $5,34 per bushel; since then, the price has fallen 5%.