The slower-than-expected pace of Black Sea wheat exports so
far this season will result in ample supplies and strong exports next season,
despite falling production, US officials said.
Local US Department of Agriculture bureaus in Russia and
Ukraine trimmed their ideas of exports in this season for both countries.
But Russian wheat exports will hit new record highs next
season, with Ukrainian exports also remaining resilient, as traders continue push
heavy old-crop stocks out the door, the officials said.
The USDA's bureau in Moscow forecast Russian wheat exports
at 28.0m tonnes in 2017-18, up 1.5m tonnes year-on-year, although missing a
forecast by the International Grain Council by 2.2m tonnes.
This increase comes despite an expected despite a drop in
production, thanks to the large inventories built up from last summers' bumper
Russian wheat production is expected to fall by 6.5m tonnes,
to 66.0m tonnes, 1.0m tonnes below a forecast from the International Grain
The falloff in production is driven primarily by a return to
average weather, as well as a slight reduction in planted area.
"Forecasts are very preliminary because the condition of winter
grains may be significantly affected by weather changes in late April and May."
But despite the falling production, and rising exports,
end-stocks will remain relatively high, at 11.13m tonnes, or 28% of total
More competitive supplies
The bureau saw exports supported by increase competitiveness
of Russian wheat in international markets, thanks in part to these carry-over
"High beginning of 2017-18 stocks of grain will continue
pushing domestic prices down… traders and the Russian government will continue
developing foreign markets for Russian grain, and the rouble will be less
volatile," the bureau said.
The rise in exports will make up for slower than expected
grain shipments this year, as the bureau cut its forecast for 2016-17 exports
by 1.5m tonnes, based on reported shipments up until last month.
"These exports did not meet traders' expectations or
preliminary forecasts for 2016-17," the bureau noted.
Ukrainian exports to
Ukrainian wheat production is forecast to fall by some 3.0m
tonnes, to 23.9m tonnes next season.
This is some 600,000 tonnes below the production forecast by
the International Grain Council.
The drop is driven by lower winter wheat plantings, "which
is not expected to be offset by spring plantings".
But the USDA bureau in Kiev sees exports in the current
marketing year at 15.9m tonnes, 1.4m tonnes below the official USDA forecast,
and down 9% year-on-year.
Wheat exports are seen falling to 12.9m tonnes in 2017-18, "based
on expected lower production area and conservative yield forecasts".