How would a Russian quota affect your wheat price? Grain Market Daily

Wednesday, 24 June 2020

Market Commentary

  • UK wheat futures (Nov-20) closed yesterday at £163.50/t, down £0.50/t on Monday’s close. Paris milling wheat futures (Dec-20) closed at €179.75/t, down €1.25/t on Monday’s close.
  • As north hemisphere winter grain harvest gets underway markets will likely feel pressure, with large global crops expected.
  • Paris rapeseed futures (Nov-20) closed yesterday at €383.00/t, down €1.25/t on Monday’s close.
  • After successive gains in the last three trading sessions off the back of crude oil, the nearby contract has been pressured as Brent crude oil (nearby) closed yesterday at $42.63/barrel, down $0.45/barrel on Monday’s close.

Anthony Speight

Analyst Cereals and Oilseeds

How would a Russian quota affect your wheat price? 

Top global grain supplier Russia are already proposing the imposition an export quota onto the second half (Jan -Jun) of the 2020/21 marketing year, although the volume has not been announced it has potential ramifications for global and UK prices. This is especially true given the UK is set to trade at or near import parity.

This is not the first time Russia has intervened in the grain market. In January, Russia proposed a non-tariff export quota of 20mt on the second half of the season. Prices initially rose on expectations of tighter supplies, before falling back on the realisation that the quota was greater than the amount Russia had available to export.

Furthermore, when global panic buying ensued in the wake of Covid-19, the Russian Agricultural ministry did limit grain exports to 7Mt from April – June. In response we saw a rise in Russian export values and global grain prices.

So what about the new proposal?

The quota is not set in stone, nor is the amount of grain that will go against the quota. However, if significant, we could see increased frontloading of Russian exports intensify at the start of the season. This would depress prices and could also offer possible support in the second half of the season if the global grain picture were to tighten. That said southern hemisphere production and exports look set to be large in 2020/21.

Russia are set to produce 77Mt of wheat this harvest, exporting a large proportion of that. In the latest WASDE report the USDA has revised up Russian exports from 35Mt to 36Mt for 2020/21 marketing year, a year-on-year increase of 7%.

Last year (2018/19) c.70% of Russian exports were done in the first half of the season (Jul-Dec), pressuring prices. With August, September and October averaging over 4.5Mt per month.


According to the latest data Russia have exported over 28.5Mt for this marketing year (Jul-Mar), out of an anticipated 33.5Mt. If expectations are met that means over 63% of wheat was exported before January.

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