Canada Markets

Russia to Maintain a Firm Grip on Wheat Exports

Cliff Jamieson
By  Cliff Jamieson , Canadian Grains Analyst
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Russia's currency has weakened against the U.S dollar for almost an entire year, reaching a level of 102 rubles to the dollar this week, supporting Russia's wheat exports. (DTN ProphetX chart)

The USDA's August World Agricultural Supply and Demand Estimates (WASDE) report hiked Russia's wheat export potential by 500,000 metric tons (mt) to 48 million metric tons (mmt), 9.5 mmt higher than the next largest competitor, which is the nations that make up the European Union. This volume represents 22.9% of total global exports for 2023-24, up from 21% last crop year and the five-year average of 18.9%.

SovEcon reported today that Russia exported 1.2 mmt of wheat in the week ending Aug. 10, the largest weekly volume shipped in two years. In addition, they note 5.4 mmt of open sales as of Aug. 15, a record high.

The country has a number of advantages in the export market. They have curbed competition from Ukraine, they are accused of shipping stolen grain and have access to the Black Sea for economical shipping.

Another advantage is a weakening currency, which is viewed as a collapse and has been met with emergency measures. As seen on the attached chart, the ruble reached a high of 52 rubles to the U.S. dollar as of Aug. 22, 2022, while reached a low of around 102 in this week's trade while shown to close at 99 rubles to the dollar in ProphetX price data.

Sanctions on Russia have left the country with few options to support its currency. The Financial Times reports that western countries have froze $300 billion in Russia's foreign reserves, eliminating the potential to sell foreign reserves in order to support the ruble. The price cap on energy exports has reduced export volumes and the value of exports, along with demand for the ruble. Meanwhile, Russia's foreign currency demand remains high as the country imports to meet the needs of the war, which has contributed to inflation.

Today, Russia took an extreme measure of increasing its key interest rate by 3.5 percentage points to 12%, as a means of supporting its currency and slowing inflation. The effect on its currency bears watching.

Cliff Jamieson can be reached at

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