In the second half of July, the bad news out of the Black Sea region greatly influenced the rise in prices of wheat in the European market. The attention of the grain market, mainly aimed at the Russian market. Russian speculators played a great card, rumors of a possible suspension of exports from Russia were the main cause of strengthening the panic on the stock exchanges in Paris, said "AGRICULTURE".
July 31, Russian Prime Minister Dmitry Medvedev surprised the market announcement that Russia will not limit exports and, despite the reduction, will give the right amount of wheat for export. From a statement by Medvedev that the Kremlin is not only not going to block exports, but definitely grain harvest could be much better than the pessimistic forecasts.
Medvedev takes as its basis the wheat crop of about 50 million tonnes, providing export potential of 11-15 million tonnes. This is contrary to the opinion of a majority of independent expert assessment, which varies between 44-47 million tons.
Recall that on July 26 the World Grains Council lowered the forecast of wheat production in Russia from 49 million tons to 45 million tons (56.2 million tons — 2011/12g). According to representatives of the trade situation in Russia remains very unclear. Putin was based on optimistic data, but at the same time, the Ministry of Agriculture of the Russian Federation, said that the prospects of the grain harvest in Russia will soon be reduced again.
Contradictory statements by officials alarming, but it’s another disturbing fact. In the second half of July, Russian companies supplying grain to export limited purchase of grain. This is according to local analysts, means that even large local market players fear the export restrictions, provided that the internal market situation has deteriorated.
The price of wheat on the stock exchange in Paris last week, has stabilized at around EUR 256 / t, and corn rose 2 euro — from EUR 257 / t to EUR 259 / t
The export market has become weaker after Medvedev’s statement. On August 2, the French bread wheat (11.5 — 12% prot-220 Hagberg) was offered for export from Rouen by EUR259 / t FOB, German milling wheat (12% prot-220 Hagberg) at EUR258 / t CPT Hamburg, on compared to $ 263 / t FOB Rouen and EUR268 / t CPT Hamburg on July 26.
Prices of major cereals in Budapest on 08/02/12 were as follows: wheat m.VIII — $ 299 / t ($ 284 / t on 26.07.12), feed wheat m.VІІІ — $ 286 / t ($ 269 / t), corn m.XI — $ 288 / ton ($ 276 / ton) and barley — m.VIII — $ 269 / ton ($ 262 / ton).
Now market participants generally agree that the price of wheat could fall in the coming days. But, despite this consensus, the more experienced experts are still waiting for the upcoming (August 10) Report of the U.S. Department of Agriculture, on the world grain balance in 2012/13g.