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Russian wheat prices seen edging up on dry Black Sea weather

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Russian export prices for the new wheat crop, due to arrive on the market this summer, remained broadly stable last week, with analysts forecasting a possible rise on continued dry and hot weather in the Black Sea region.

 

Black Sea prices for the new Russian wheat crop with 12.5% protein content were $195 per tonne on a free on board (FOB) basis at the end of last week, unchanged from a week earlier, Russian agricultural consultancy IKAR said in a note.

 

SovEcon, another Moscow-based consultancy, quoted FOB new crop for July delivery as rising by $1 to $196 per tonne, supported by stronger futures markets and concerns about the Black Sea crop.

 

"The market continues to watch the Black Sea weather closely where hot and dry weather continues to threaten the new crop," SovEcon said.

 

It added that the last two weeks in the European part of Russia and Eastern Ukraine had been "significantly drier" than the norm.

 

Across almost all regions, rainfall was at 50-60% of the norm, with some areas - including Rostov, Voronezh and Eastern Ukraine - receiving less than 20-30% of the precipitation normally expected at this time, according to SovEcon.

 

"The weather is expected to remain very dry in (the) next two weeks," the consultancy said, adding that this could affect wheat crop estimates in the Russian Volga Valley and in parts of the Center.

 

Russia exported 41.5 million tonnes of grain from the start of the current 2018/19 marketing season to June 13, down 17% from the previous season, according to SovEcon. That included 34.2 million tonnes of wheat.

 

Domestic prices for third-class wheat fell again last week, down by 25 roubles to 11,800 roubles ($183.49) a tonne at the end of last week in the European part of Russia on an ex-works basis, according to SovEcon. Ex-works supply does not include delivery costs.

 

By June 13, farmers had sown spring grains on 28.8 million hectares, compared with 28.1 million hectares a year ago, SovEcon said.

 

Sunflower seed prices continued to rise, up 100 roubles to 19,025 roubles a tonne, SovEcon said. Domestic sunflower oil prices rose by 100 roubles to 42,850 roubles a tonne, while FOB export prices for sunflower oil rose $5 to $680 a tonne, SovEcon said.

 

Ikar said its white sugar price index for southern Russia was $399.20 a tonne on June 14, down $7.05 from a week earlier.

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