Russia flooded the market with grains

Russian grain flows around the world in a flow the world has not seen since the tsarist empire a century ago, but the country's export expansion seems to have hit the wall due to a lack of infrastructure.

While Russia has increased its grain export capacity ninefold over the past 15 years, even this impressive growth will not be enough to keep pace with its 2017 cereal harvest, which is expected to reach a record 133 million tonnes.

The surge in Russian exports contributed to a global grain surplus. According to USDA data, the global wheat market is set for its fifth surplus in 2017-1918, with stocks hitting a record 268 million tonnes.

Meanwhile, world wheat prices have been steadily declining. Russia also intends to overtake the United States as the world's largest wheat exporter this year - reclaiming the top spot it led before World War I and strengthening its lead over other major wheat exporters such as the European Union, Canada. Australia and Ukraine.

In search of new markets for its grain, Russia is increasing its exports to Asian countries such as Bangladesh and Indonesia, which are traditionally supplied by Australia. Russia also boosted grain exports to Morocco and several other markets traditionally provided by France, taking advantage of France's poor harvest last year.

However, there are fears that Russian exports will steadily grow, at least for the next few years, given the practical constraints that prevent them from delivering even more rapidly growing grain stocks, farmers and analysts say.