‘SovEcon’ Predicts Potential Record-Breaking Russian Wheat Exports in June Amidst Market Constraints

Russian wheat exports in June are poised to set a new record for the month, with estimates ranging from 3.5 to 4 million tons. This figure not only surpasses the 3.6 million tons recorded in the same period last year but also the monthly average of 1.6 million tons. Despite this end-of-season surge, experts for the Russian analytical center ‘SovEcon’ believe that shipments may soon face a downturn.

Sales and prices saw a concurrent rise in May. Thus, September wheat futures on the French MATIF marked a 14% price increase, reaching 259 euros per ton last month. At the same time, the price spread between French and Russian wheat futures has initiated the interest of foreign buyers in the latter, the center reminded.

In May, the activities of international buyers strengthened local prices for Russian wheat. This month, however, the situation has shifted, resulting in a downturn in quotations. According to experts, this trend may emerge as a limiting factor for Russian wheat exports.  

Russian products have become less competitive in price. The Egyptian GASC agency refrained from buying Russian wheat during the last two tenders. Turkey’s temporary ban on wheat imports may also become an additional obstacle to exports. “We may see a further decline in ruble prices in the short term. However, given the significant deterioration in prospects for the new harvest, we believe this trend is unlikely to persist for long,” say analysts at ‘SovEcon’.