Wheat traders caught short by rally in Black Sea prices

* Traders sold Russian wheat with 11.5% protein at $217-$222
C&F
to Indonesia
* Russian wheat quoted at around $236/T this week to
Indonesia
* Lack of Black Sea farmer selling prevented merchants from
covering positions

By Naveen Thukral
SINGAPORE, Aug 5 (Reuters) - Wheat merchants who had
committed to sell to Asian millers are now facing hefty losses
after an unexpected spike in Russian and Ukrainian grain prices
as farmers held on to their supplies, two trade sources told
Reuters.
Russian wheat with 11.5% protein was quoted around $236 per
tonne, including cost and freight (C&F), this week to Indonesia,
up from sales committed at between $217 and $222 a tonne in the
last few months for August shipment.
"Farmers were really smart this year, they did not sell to
trading companies in advance," said one the sources, who sells
wheat at an international trading company. "When traders started
covering shorts, prices started rising."
The volume of wheat sold but not covered could be a big
chunk of total sales, both sources said.
"It is hard to give the exact volume of shorts but it could
be as high as half of the wheat sold by traders," the second
trader said. The sources, from Singapore, spoke on condition of
anonymity, as they were not authorised to speak to media.
Russian wheat export prices eased last week after three
weeks of gains, under pressure from the new crop harvest and a
weakening rouble against the dollar, IKAR agriculture
consultancy said in a note on Monday.
Black Sea-loaded Russian wheat with 12.5% protein was at
$207 a tonne free on board for supply in August at the end of
last week, down $3 from the week before, IKAR said. But according to Sovecon, an agriculture consultancy in
Moscow, supplies remain tight in some areas and "a few buyers
need grain urgently to load approaching vessels".
Indonesia, the world's second-largest wheat importer, takes
around 900,000 tonnes a month, buying large volumes from the
Black Sea region. Thailand and the Philippines mainly use Black
Sea wheat for animal feed.
Global wheat prices are likely to ease towards the end of
the year with expectations of a bumper harvest in Australia.
"We have to wait and see, if Australian farmers also hold
back supplies it could provide support to the market," the first
source said.

<^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^
Black Sea wheat export prices https://tmsnrt.rs/2XufbX0
^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^^>