The analytical center "SovEcon" has reduced its forecast for Russian wheat exports for this season by 0.6 million tonnes to 42.2 million tonnes. They believe that the main constraint for exports is low profitability, as Russian exporters are currently operating at a loss.
However, the export estimate for the next season, 2025/26, has been increased by 0.6 million tonnes to 38.9 million tonnes. This is due to the slow pace of shipments at present and an increase in stocks. "SovEcon" had already raised its export forecast for the next season by adding 1.9 million tonnes to the previous estimate. They also noted that initial wheat stocks turned out to be higher than expected due to a decrease in exports in the previous season and a slight reduction in domestic wheat consumption.
Analysts believe that the wheat export quota for this season, amounting to 10.6 million tonnes and starting from February 15, may not be fully utilized. Major traders, who received a large share of the quota, will not rush with deliveries in an effort to improve their margins.
According to "SovEcon's" assessment, the market is too optimistic about the potential for wheat exports from Russia this season. They point to limited domestic supply, a strong ruble, and exporters' negative margins as factors that will slow down export rates. Considering the tight global wheat supply and demand balance, "SovEcon" predicts that world prices will remain supported until the end of the season. In the first month of this year, Russian wheat with 12.5% protein increased by $12 and now costs $248 per tonne (FOB).