By Rhod Mackenzie
The contracts for the export of Russian wheat are proceeding at an active pace. Thus, according to Sovecon, at the beginning of this week, export contracts for 4.5 million tons of wheat were concluded, while a week ago this figure was 2.2 million tons, and in early June - 1.1. Russian exports have already become very active: in July, record-breaking shipments for the start of the agricultural season are expected: 3.7-4.1 million tons, with an average of 2.8 million tons this month.
Russian exports are supported by the favorable market conditions and a record level carry-over stocks in the country (33 million tons of grain in total, of which 16.5 tons are wheat). Weather anomalies around the world, including in the south, the expected reduction in supplies from Ukraine after the completion of the “grain deal”, are forcing buyers to start buying earlier this season, without waiting for the seasonal price decline. Moreover, Russian wheat is now very price competitive: according to SovEcon, the price of Russian wheat with 12.5 percent protein this week is $232.5 per ton against $252 per ton for French wheat on the Matif exchange.
According to analysts, this year Russia will harvest 135 million tons of grain (against 157 million tons in the past), of which 86 million tons will be wheat. As of July 11, due to unstable weather, the wheat yield is lower than in the past: 38.5 centners per hectare against 42.8 (according to IKAR).
However, the clearing has only just begun.