19:05 UK, 26th January 2012, by Agrimoney.com
Cold, dryness, quality stoke Black Sea grain fears

More question marks appeared over Black Sea grain supplies as Russia braced for extreme cold, Kazakh exports faced claims of poor quality, and a 30% harvest slump was forecast for Ukraine.

Temperatures in southern Russia, east of the Black Sea, a major grain producing region fell on Thursday to zero Fahrenheit (-17 degrees Celsius) and below, and to -12 Fahrenheit (-24 Celsius) and colder further north  in the Volga, Martell Crop Projections said.

The reading followed a warning from Russia's official weather watcher, the Hydrometeorological Service, that average daily temperatures in the country's Southern Federal District and the North Caucasus, major grain growing areas, looked like coming in 10-15 degrees Celsius below normal over the next six days.

And the cold temperatures followed a period of relative dryness for the area, which has received less than 5cm of snow between January 10-20, Martell Crop Projections said.

"They do now have as much snow as normal in these southern areas," Gail Martell, at Martell Crop Projections, told Agrimoney.com.

OK for now?

Cold weather on crops denied a snow blanket can lead to crop losses, so-called winterkill, although Ms Martell said that history suggested that more persistent cold was likely needed to cause significant damage to a crop which had gone into winter in good condition.

"It is a pretty hardy crop," she said.

However, the forecast put markets on alert for a country already in the spotlight over fears of export curbs, after a strong pace of grain shipments in 2011-12 left them on track to hit a government ceiling of 23m-25m tonnes.

"Russia's government is less likely to waive the [export] target if they think there are risks to the crop in the ground and the harvest ahead," a UK grain trader told Agrimoney.com.

Poor Ukraine prospects

And it comes amid concerns of a poor harvest in Ukraine, where a dry autumn has left winter crop seedlings in poor condition, prompting analysis group ProAgro on Thursday to forecast a drop of 30%, to some 40m tonnes, in the country's grains harvest this year.

The forecast is below a 44m-46m-tonne estimate from Ukraine's farm minister, Mykola Prysyazhnyuk, two weeks ago. 

The wheat harvest is likely to fall by more than 8m tonnes to 14m tonnes, ProAgro said.

Meanwhile, Egypt, the top wheat importer, cast a cloud over supplies from Kazakhstan by saying it had rejected on quality grounds one of four cargos bought so far in 2011-12, and agreed that the other three be switched to Russian-origin grain.

The rejected cargo contained unauthorised seeds, Egypt's state grain buyer, the General Authority for Supply Commodities (Gasc) told Reuters.

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