Prices for high-protein wheat in Russia reached the highest level since November 2015 19 February, 2018 at 13:02

As estimates for the Black Sea nation’s harvest keep growing, so does the outlook for exports. The world’s top exporter is now expected to sell 36.6 million metric tons overseas, according to consultants SovEcon and the Institute for Agricultural Market Studies, or IKAR.

Helped by fertile soil and more farm investment, Russian wheat output has boomed in recent years and allowed the country to grab market share from major exporters like the U.S. and Canada. Russia’s ever-growing harvests have also added to a global glut of the grain that pushed benchmark futures in Chicago down 50 percent since mid-2012.

Russia’s most recent harvest turned out bigger than expected as favorable spring and summer weather boosted yields. The record crop and relatively weak ruble has kept Russian grain competitive, while ports have coped with bigger supplies as mild winter conditions kept shipping lanes open later than usual.

SovEcon and IKAR’s estimate for Russian shipments are bigger than the forecast from the U.S. Department of Agriculture, which pegs this season’s amount at 36 million tons. That would still be the most since America exported 36.8 million tons in the 1992-93 season, U.S. government data show.

Export prices for Russian wheat continued rising last week. Depending on the class, milling wheat in Novorossiysk port closed the week on average up another $1-2/MT at $198‑200/MT FOB for 12.5%-protein wheat, $190‑193/MT FOB for 11.5%-protein wheat and $186‑189/MT FOB for feed wheat, February-March delivery.