The Russian wheat export market has experienced a notable downtrend since the middle of November, primarily impacting wheat with 12.5% protein content.
According to price monitoring conducted by SovEcon, the Free On Board (FOB) export prices for this specific grade of Russian wheat have seen a decrease of $4 per metric ton, settling in the range of $228 to $230 per metric ton.
This recent price decline has driven the quotes to their lowest point observed since mid-September.
The primary factor contributing to this weakening price structure is the intensified global competition.
Specifically, the Russian offering is currently facing significant competitive pressure from large supplies of wheat originating from two key agricultural exporting nations: Australia and Argentina.
The increased availability and competitive pricing of Australian and Argentine wheat in the international market are compelling Russian exporters to lower their prices to secure sales and maintain market share, according to SovEcon.
This dynamic highlights the current oversupply in the global wheat market and the intense rivalry among major exporters.
Intensified competition
Russian wheat export prices are experiencing downward pressure, primarily driven by the increasingly optimistic crop forecasts emerging from key Southern Hemisphere producers, SovEcon said.
This anticipated surge in global supply is dampening the competitiveness of Russian grain in the international market.
Specifically, the Buenos Aires Grain Exchange has released a highly positive estimate for Argentina’s 2025-26 wheat crop, projecting a record-breaking output of 25.5 million metric tons (mmt).
Such a substantial harvest from one of the world’s major wheat exporters will significantly contribute to global stocks.
Similarly, in Australia, the Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts a robust wheat output.
Their current projection stands at 35.6 mmt, a volume that, if realised, would secure the position of the country’s third-largest wheat crop on record.
Prices have dropped in both Argentina and Australia since mid-November.
In Argentina, the price has decreased by $7 per metric ton to $208 per metric ton FOB, while in Australia, it has fallen by $4 per metric ton to $249 per metric ton FOB.
Buyer hesitation and global stock outlook
“Large wheat buyers may soon pause purchases as they wait for the Southern Hemisphere crop to reach the market,” SovEcon said.
This primarily concerns Egypt, Russia’s top wheat buyer.
It was reported in the media during November that Egypt had guaranteed a sufficient supply of wheat to meet its domestic demand until the close of February 2026.
Slow farmer sales are supporting prices across many regions.
This is because farmers are often unwilling to sell their wheat at current prices, which are frequently near or below their production costs, according to SovEcon.
Relatively low global wheat stocks are another contributing factor.
SovEcon estimates that the stock-to-use ratio for major exporters is projected to be 16.6% this season.
While this is slightly higher than the previous two seasons (15.1–15.4%), it remains considerably lower than the peak of 19.4%.
“The strong Southern Hemisphere crop may not yet be fully priced in,” Andrey Sizov, managing director at SovEcon said.
However, given historically low stocks, the downside potential for global prices appears limited.
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