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Export prices of Russian wheat with 12.5% protein content, supplied in July-August, have been decreasing for seven weeks. According to the report of the analytical center "Rusagrotrans," last week, the price dropped to $217/ton FOB, which is $2/ton lower than the previous week. The cost of French and Romanian wheat decreased by $4, reaching $233/ton and $220/ton respectively, while the price of American wheat dropped by $15 to $213/ton.
The market is being pressured by the report from the US Department of Agriculture, which predicts a higher-than-expected increase in global wheat stocks, as well as improved crop prospects in the USA. According to American analysts, wheat production in the new season will be around 796.2 million tons, up from the previous estimate of 790.7 million tons. Moreover, the harvested crop in the USA is expected to increase to 54.7 million tons, which is 3.6 million tons more than the previous forecast. The projected global wheat stocks are expected to decrease from about 261 million tons last season to 257.2 million tons, still 5 million tons higher than the previous June forecast.
The gradual deterioration of the condition of soft wheat crops in France is also influencing the market. According to the "Rusagrotrans" report, by July 15, the share of crops in good and excellent condition decreased from 57% to 52%. This is the worst figure since 2019 when the share of crops in good and excellent condition was about 42%. At the same time, the soft wheat harvest in France is forecasted by Strategie Grains to be 28.7 million tons, lower than last year's 35.1 million tons.
Positive price effects were seen from tenders by Egypt and Algeria, where about 1.5 million tons of wheat were purchased, with a significant portion acquired from Russia. For example, on June 16, Egypt's General Authority for Supply Commodities (GASC) purchased 770,000 tons of milling wheat of Russian (720,000 tons) and Bulgarian (50,000 tons) origin at an immediate payment tender. The price of Russian wheat was $221 FOB plus freight ($19.97-21.9) for delivery in September. Additionally, on July 18, the Algerian agency OAIC purchased 600-780,000 tons of milling wheat of unknown origin (presumably grain from Black Sea countries). The purchase price ranged from $241 to $244/ton C&F, and the freight cost from Russia to Algeria is around $28/ton.
According to "Rusagrotrans" analysts, prices for wheat with 12.5% protein at deep-water ports decreased by 50 rubles per week to 15,300-15,500 rubles/ton excluding VAT. Prices for wheat with 12.5% protein at shallow-water rivers increased by 700 rubles to 14,500 rubles/ton. Last year at the same time, prices were 16,500 rubles/ton and 14,500 rubles/ton respectively.
Prices for 4th-grade wheat (EXW elevator) in Southern Russia remain at 13,200-13,500 rubles/ton excluding VAT, in the Volga region they are at 12,900-13,000 rubles/ton. In Central Russia, amid the active arrival of new crop grain, demand prices from processors decreased by 1,700 rubles to 12,500-13,300 rubles/ton. In Siberia, prices remain at 11,800-12,700 rubles/ton EXW elevator.
