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Wheat Importers Stock Up on Cheap Grain as Dry Weather Looms in Russia

Posted by Flaman Agriculture Oct 15, 2015

Bloomberg, October 13 2015

The wheat market is seeing a flurry of business, signaling buyers may be locking in supplies as concerns develop about Russia’s next crop.

Major importing countries including Egypt, Algeria and Saudi Arabia have all bought wheat in international tenders in the past week, lured by prices that are about 14 percent lower than at the start of the year. While record crops worldwide have meantbargain prices this year for buyers, wheat costs in Chicago, Paris andRussia’s port city of Novorossiysk have all increased from the lows reached in late August or early September.

Russia, set to overtake the U.S. and Canada this season as the world’s biggest wheat exporter, has seen less than 40 percent of the normal amount of rain in the past 30 days across large swathes of its central and western growing regions, World Ag Weather data show, and much of Ukraine is in similar shape. While Black Sea-region farmers are still planting crops for next year’s harvest, and there’s plenty of time for a recovery in moisture, the concern has been enough to bring some buyers to the market.

“We’ve just started to see some risks looming for the 2016 crops,” Benjamin Bodart, a director at CRM Agri-Commodities in Newmarket, England, said by phone on Monday. “We’re not anywhere near a tight supply situation, but probably some major importing countries just took the opportunity to book forward some commodities.”

Egypt, the world’s biggest wheat importer, bought 180,000 metric tons in a tender on Friday, with supplies coming from Russia and Romania. Algeria, the largest buyer from France, purchased at least 675,000 tons, Reuters reported, citing traders in Europe.
Saudi Arabia’s state grains agency bought 740,000 tons of hard wheat, according to a statement on Monday.Wheat prices on the Chicago Board of Trade, the global benchmark, traded at $5.075 a bushel by 7:05 a.m. local time on Tuesday, about 9.5 percent higher than a four-month low reached in early September. Futures on Euronext in Paris, which traded at the lowest in almost a year on Sept. 4, are up almost 9 percent since then, while Russian prices climbed 8.4 percent since late August, according to pricing from the Moscow-based Institute for Agricultural Market Studies.

Even though prices have rebounded from recent lows, there are still plenty of wheat supplies around to stave off a larger rally, Bodart said. Global wheat stockpiles this season will reach the largest on record, the U.S. Department of Agriculture estimates. Ample supplies will send the world’s food

import bill this year to a five-year low, according to the United Nations’ Food & Agriculture Organization in Rome.In other markets,
corn for December delivery fell 0.4 percent to $3.7925 a bushel in Chicago while soybeans for November delivery increased 0.7 percent to $8.9375 a bushel. Soybean meal for December delivery gained 0.7 percent to $311.50 for 2,000 pounds.
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Posted in Farm related news | Tagged with wheat Russia wheat demand Egypt | More articles by Flaman Agriculture

Russian Bakers Want Change to Wheat Duty That Tries to Help Them

Posted by Flaman Agriculture Aug 13, 2015

Bloomberg is reporting that . . . .

Russia should change a levy on wheat exports that led to a slump in shipments last month, according to the local bakers and pig farmers the policy is trying to help.

Sales abroad by Russia, the third-largest wheat exporter, fell 53 percent in July from a year earlier to the lowest level for that month since 2009, according to figures from grain carrier ZAO Rusagrotrans and the government. The drop followed the enforcement of the export duty to shield bakers and farmers of livestock from rising prices amid double-digit food inflation.

“We support regulating exports,” said Valery Cheshinsky, president of the Russian Union of Bread Baking Industry. “But we don’t wish harm to anyone.”


The bakers’ lobby, whose members produce more than half of Russia’s bread, is joining the National Pig Farmers’ Union in supporting calls for changes to the levy, with Prime Minister Dmitry Medvedev seeking proposals on the issue by Sept. 10. Concerns include the possibility that Russian wheat farmers will sow less of the grain if exports continue to decline.

The tax should be a certain percentage of the customs value of shipments or a fixed amount, replacing the current more complex formula, according to Cheshinsky. That would make the situation more predictable for exporters and allow flour millers to build reserves at the start of each season when prices are typically lower, he said.

Full story is at http://www.bloomberg.com/news/articles/2015-08-13/russian-bakers-want-change-to-wheat-duty-that-tries-to-help-them

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Posted in Commodity prices | Tagged with wheat Russia trade | More articles by Flaman Agriculture

Russian PM orders proposals on wheat export duty

Posted by Flaman Agriculture Aug 04, 2015

Reuters is reporting that . . . .

Russian Prime Minister Dmitry Medvedev has ordered the preparation of proposals on a grain export duty, following a meeting on the Russian agriculture sector on Monday, according to the government's website.

Medvedev, whose comments were published by the website, did not make any specific orders on the duty. The website also quoted him as saying Russia plans to have a grain crop of around 100 million tonnes this year.


Russia introduced a wheat export tax in July, intended to stop exports surging if the rouble drops steeply.

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Posted in Commodity prices | Tagged with wheat Russia trade | More articles by Flaman Agriculture