After four consecutive weeks of decline, Russian 12.5% protein wheat export prices saw a modest increase of $1.5, reaching $228–229 per metric ton free-on-board (FOB), supported by limited supply, a strengthening ruble, and global market conditions.
“Russian wheat supply remains limited, especially in the South, the country’s key export region,” agricultural consultancy SovEcon said in its latest update.
One of the factors behind the reduced supply there was a poor crop caused by unfavorable weather.
SovEcon’s latest projections for the 2025 wheat harvest in the Southern region indicate a notable decline.
The estimated output stands at 30.9 million metric tons, which represents a decrease compared to the previous year’s harvest of 32.6 mmt, SovEcon said.
Furthermore, this projection is significantly below the five-year average for the region, which typically sees a production of 35.0 mmt.
This downward revision in estimates suggests potential challenges for the upcoming wheat season in the South, which could have implications for agricultural markets and food supply.
The reasons for this anticipated reduction could range from unfavorable weather conditions, such as drought or excessive rainfall, to issues with crop diseases or changes in planting acreage.
Ruble factor
The significant strengthening of the Russian ruble has played a crucial role in bolstering the export prices of wheat.
This direct correlation is primarily due to the pricing mechanisms involved in international trade.
When the ruble appreciates against other major currencies, such as the US dollar, Russian exporters find that their costs, which are primarily in rubles, translate to a lower equivalent in foreign currency.
This effectively increases their profit margins when selling wheat internationally at a given dollar-denominated price.
Consequently, with improved profitability, exporters are less incentivised to lower their prices to secure sales, leading to a firmer stance on their asking prices for wheat.
The dollar exchange rate, set by the Central Bank of Russia, decreased by 2.9% week-on-week to 83.2 rubles on Friday, according to SovEcon.
Effective September 24, Russia’s wheat export tax will increase to 655.6 rubles per metric ton (equivalent to $7.9 per metric ton), up from 495.9 rubles per metric ton ($5.8/metric ton) the previous week, the consultancy said.
Global prices
Global wheat markets saw a notable upward trend last week, with price increases observed across various key regions.
In the Black Sea region, specifically Bulgaria and Romania (CVB), wheat prices climbed by $3–5 per metric ton, settling in the range of $235–237 per metric ton.
This rise indicates a strengthening demand or tightening supply in these significant exporting countries.
Similarly, French wheat prices also experienced an increase, rising by $6 per metric ton to reach $232 per metric ton.
France is a major producer and exporter of wheat within the European Union, and such price movements often reflect broader European market dynamics, including harvest expectations, export demand, and currency fluctuations.
Andrey Sizov, managing director at SovEcon said:
The strengthening of physical market prices may indicate that the actual supply and demand balance, particularly in Europe and the Black Sea region, is tighter than futures suggest.
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