SovEcon boosts Russian wheat export outlook amid strong demand, better margins

Agricultural consultancy SovEcon has raised its forecast for Russian wheat exports for the 2025-26 marketing season, boosting the figure by 0.4 million metric tons (MMT) to a commanding 44.6 MMT. 

The revision comes as a direct result of the consistently robust pace of wheat shipments from the world's largest wheat exporter, SovEcon said in its latest update. 

This increased export capacity signals a significant supply presence in the global grain market and underscores the resilience of Russia's wheat supply chain. 

Strong monthly export performance

The upward adjustment is closely watched by international grain traders and importing nations, as Russia's export volume is a critical factor influencing global wheat prices and supply dynamics.

Russia has maintained a strong pace of wheat exports in recent months, with estimates indicating a significant year-over-year increase in December shipments. 

SovEcon projects Russian wheat exports for December at 4.2 MMT, which is a notable rise from 3.4 MMT a year ago, although it remains just under the 2017 record of 4.3 MMT. 

This trend follows extremely strong performance in the preceding months. November exports reached a record-breaking 5.1 MMT, up substantially from 4.1 MMT in the previous year. 

Similarly, October saw high volumes, with shipments hitting 5.5 MMT, narrowly missing last year’s record of 5.6 MMT. Overall, these figures highlight Russia's consistent and robust role as a major global wheat exporter.

Key importers re-engage

Importer demand for Russian wheat is currently robust, sustaining historically high shipment volumes in recent months. 

This consistent demand highlighted the competitive pricing and reliable supply offered by Russia in the global grain market. 

Notably, key buyers who had paused their purchasing activities, such as Egypt and Saudi Arabia, in anticipation of future price drops, have now re-entered the market, SovEcon said. 

This renewed engagement from major importers underscores a broader acceptance of current pricing levels and a need to secure essential wheat supplies, further solidifying Russia's dominant position as a global wheat exporter.

Market conditions are currently providing a favourable environment for exporters, the agricultural consultancy said. 

Improved profitability from price divergence

A key driver is the divergence between domestic and international pricing.

Specifically, domestic prices for the commodity are continuing a trend of easing, or becoming lower. 

In contrast, export prices are remaining stable and robust, holding firm at around $230 per ton Free On Board (FOB). This shift in the pricing structure has led to a significant change in exporter profitability. 

Margins, which were previously in negative territory, have now "flipped" to a slightly positive position, equating to a few dollars per ton. This indicates a modest but welcome improvement in the financial viability of export operations.

“Russia’s export campaign started slowly this season but has accelerated to near-record levels,” Andrey Sizov, managing director at SovEcon, said in the update. 

Meanwhile, the US Department of Agriculture's December forecast for Russian grain exports remained consistent, with wheat exports holding steady at 44.0 MMT. 

Similarly, the forecasts for barley and corn exports were unchanged at 3.5 MMT and 3.0 MMT, respectively.