Russia Seen Running Low on Grain to Export in November by ODA

Russia will have little grain left to export in November and wheat prices already reflect the lack of supply, according to Alexandre Marie, a wheat analyst at Bourges, France-based farm adviser Offre & Demande Agricole.

Economy Minister Andrei Belousov said today Russia may curb grain shipments should prices keep rising. Following are comments Marie made by phone. Milling wheat for November delivery traded at 262.75 euros ($341.28) a metric ton by 5:48 p.m. on NYSE Liffe in Paris.

“They’re confronted with a dilemma. On the one hand, they have to manage inflation in the country to protect purchasing power. At the same time, they have the World Trade Organization rules that interdict an embargo. An embargo seems unlikely. However, they could put in measures to limit exports. They could also do nothing and see if the market regulates itself.

“They have to preserve their image and at the same time manage inflation. Nobody wanted to buy” after the end of a 10- month ban on grain exports imposed by Russia in 2010.

“We see that Egypt accelerated its purchases. They saw the losses in the Black Sea, and they were able to pick up some Russian wheat at a bargain. I think that’s ended and the market will now open for Europe, particularly France, in the coming months. Afterwards the U.S. will take over the baton.”

“In November there won’t be much left to sell. If there’s no limit on exports, the market will regulate itself progressively, and we’re already seeing that.

“The market has already understood that Russia doesn’t have a lot of potential. If they come with an export limit, it could provide some support, but it’s not going to get us to 300 euros,” Marie said, referring to the price of Paris milling wheat.

To contact the reporter on this story: Rudy Ruitenberg in Paris at rruitenberg@bloomberg.net

To contact the editor responsible for this story: Claudia Carpenter at ccarpenter2@bloomberg.net

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