Russia is back in the global wheat market with a vengeance, according to a market analyst with the Canadian Wheat Board.
"The one thing we really have to keep in mind for the tail end of the 10-11 year and the first six months of the 11-12 year is the renewed presence of the Black Sea - Russia, Ukraine, Kazahkstan, particularly Russia which was absent from the market last year. They are back," says Neil Townsend.
With Russia lifting its drought-related export restrictions, exporters have been aggressively selling feed and low-quality wheat, buying back market share among international customers familiar with Russian grain.
"Even before they sold a tonne, the price dropped $60 per tonne in the Mediterranean basin area. Now they're starting to sell, and they've been selling more around the $240 per tonne mark," says Townsend. "So you can see how that's significantly below where our thought process would be and what we're hoping to achieve in terms of marketing."
Meanwhile, he says tight corn supplies continue to have a supportive influence on wheat prices.
"On the one hand, they found some more corn for the 2010-11 crop, but on the other hand, there's a perception that there's still a weather market with this hot air mass over the U.S. corn crop," he says. "So that's kept the market from really falling, but the market is definitely down."