Russian Wheat Export Prices Soar Amidst Escalating

Russian wheat export prices surged last week amid difficult shipping conditions in the Black Sea and a new wave of attacks in the Strait of Hormuz, analysts said on Monday.

Forecasts for July wheat shipments from Russia continued to fall, even as domestic wheat prices declined sharply across all regions this week, they added, noting that weak demand at the Azov Sea and Volga terminals was impacting domestic prices.

Shipping from Russia’s shallow-water ports on the Black Sea has remained restricted “for safety reasons” since July 10 amid drone strikes in the wider area, market sources told Reuters.

The price of Russian new-crop wheat with 12.5% protein content for free-on-board delivery in August rose $7 to $235 a ton at the end of last week compared with the previous week, said Dmitry Rylko, head of consultancy IKAR.

“The escalation in military and political risks in the Black Sea and the situation in the Strait of Hormuz — this is what is driving the overall price increase,” Rylko said.

Sovecon, another consultancy, put last week’s prices for Russia’s new-crop wheat with 12.5% protein at $238 to $241 a ton, compared with $227 to $229 the previous week.

The agency has revised down its estimate for wheat exports in July by 0.5 million tons to 1.5 million tons.

“We expect supplies to deep–sea ports to increase in the near term as harvesting progresses and navigation in the Sea of Azov remains closed. Rising logistics costs, however, will remain a constraint,” Sovecon head Andrei Sizov said.

Harvesting in Russia is lagging behind last year’s pace, Agriculture Minister Oksana Lut said on Friday. Following the southern areas, harvesting has now begun in the Central and Volga regions.

As of July 17, Russia had harvested 21 million tons of grain, of which 15.9 million tons was wheat. So far, around 12% of the total area has been harvested.

More Russian data released by Sovecon and IKAR:

(Reuters)