WHEAT MARKET UPDATE – 19/09/2025

Russian crop conditions and impact on global prices

• Winter wheat planting currently ongoing with 37% of the crop in southern Russia and 20% in the Volga region
• Soil moisture levels in key regions (Rostov) are at their lowest in 20 years, worse than last year
• High interest rate of 18% in Russia is causing severe cash flow constraints for farmers (with 10-20% growers in financial stress)
• Government’s official crop estimates (~86 million tons) are considered inflated and politically motivated to push farmers to sell early for tax revenue
• Actual production likely capped around 82-85 million tons, ending 20 years of steady annual production increases of ~5 million tons
• Spring wheat planting area was the lowest in 40 years due to lack of inputs and cash, indicating further production constraints
• Potential for price rebound around Apr/May 2026 if market recognises limited production and exports run low, leading to rising Black Sea spot contract prices and backwardation in futures markets
• Russian export taxes possibly increasing to 10% to pressure farmers to sell before hike; farmers likely to hold back sales, causing export volumes to decline
• Strategic implication: This creates a window for potentially better pricing opportunities in mid-2026, critical for positioning sales and risk management
• Harvest cash flow and Post harvest market participation with Flexi Grain area based contract