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Russia may export 3.7 million tons of wheat in July
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Russia may export 3.7 million tons of wheat in July

Russia exported record volumes of grain in 2022/2023.

3 July 2023 3 July 2023

Russia ends the 2022/2023 grain season with record grain exports. In particular, wheat exports in June surpassed the last record of 2018 by 40%, according to the materials of the Rusagrotrans Analytical Center, available to the pole.rf magazine.

“The estimate of wheat exports in June 2023, taking into account the EAEU countries, has been increased from 3.55 to 3.84 million tons (the previous record in 2018 was 2.77 million tons). The forecast for wheat exports in July 2023, also taking into account the EAEU countries, is about 3.7 million tons (the previous record in 2018 was 4 million tons)," the materials say.

Export prices
Export bid prices for Russian wheat with 12.5% protein for July delivery remained at $230-235 per tonne FOB. The price for American wheat fell to $261 per ton (-$29), for French - to $251 per ton (-$21).

The exchange market for wheat fell on the background of expected rains in the US Midwest and improvement in the condition of winter wheat.

In the drylands of the US Midwest, significant rainfall is expected, which is likely to improve the condition of corn, whose crops are in a depressed state, the worst since 1988.

In the US, the share of winter wheat in good/excellent condition rose to 40% as of June 25, against market expectations of 38% (38% last week, 30% last year). The share of 'excellent' and 'good' spring wheat declined to 50% against expectations of 51% (51% a week earlier, 59% last year). The share of corn in good/excellent condition fell to 50%, below market expectations of 52% (55% a week earlier, 67% last year). Winter wheat harvest is 24% complete, well below expectations of 29% (15% last week, 39% last year, 33% 5-year average).

Analysts note that weekly data on US exports of wheat, corn and soybeans were at the lower end of market expectations. Export of wheat amounted to 204 thousand tons (expectations 200-400 thousand tons).

The International Grains Council (IGC) cut its forecast for global wheat stocks at the end of the 2023/2024 season by 6.7 million tons to 264.3 million tons due to an increase in the consumption forecast (mainly in China). At the same time, the forecast for the world wheat harvest in 2023/2024 agricultural year was increased by 3.4 million tons to 786.1 million tons (Ukraine +2.3 million tons, Turkey +1.7 million tons, Kazakhstan -1 million tons, EU -0 .7 million tons).

StatCan estimated the area under wheat in Canada in 2023 at a 22-year high of 10.89 million hectares (above market expectations of 10.72 million hectares), barley at 2.96 million hectares (average expectations of 2.91 million hectares).

Morocco plans to subsidize the import of 2.5 million tons of wheat from July 1 to September 30, 2023. The local USDA office predicts a harvest of 4.16 million tons of wheat in the 2023/2024 season, while the official estimate is 2.98 million tons.
 

Prices in ports and within Russia
 
Prices for wheat (grade 4, 12.5% protein) in deep water ports rose to 15,000 rubles per ton without VAT (+150 rubles compared to the previous week), in low water - up to 13,500 rubles per ton (+200 rubles). Last year, prices were 15,000 rubles per ton in deep water and 13,600 rubles per ton in shallow water.

The domestic wheat market continued to grow in the South and remained stable in other regions.

Prices for wheat grade 4 (12.5% protein, EXW elevator):

In the South increased to 13,100-13,400 rubles/t (+750 rubles),
In the Center - remained at the level of 9,600-10,200 rubles per ton
In the Volga region - 9,900-10,500 rubles per ton
In Siberia - 9,200-11,000 rubles per ton.
Analysts note that dry weather in the South will be favorable for grain harvesting, but hot weather (+30…+35°С) may reduce the natural weight of grain. Precipitation in the next two weeks will replenish moisture reserves in the Center, the Volga region, the Urals and Siberia. The return of hot weather in the second week of July in Siberia could renew the risk of drought.

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