Russia’s chances of another bumper wheat harvest, and of maintaining pre-eminence in world exports of the grain, rose a notch as SovEcon upgraded its forecast for this year’s harvest, citing a mild winter.
SovEcon lifted by 900,000 tonnes to 77.6m tonnes its forecast for the Russian wheat harvest this year – extending into 2018 the spree of upgrades which marked last year’s crop.
While that would still leave 2018 output below last season’s 85.8m-tonne record result, large stocks left over from last year, coupled with the prospect of another historically high harvest, would leave Russia with sufficient supplies for another bumper export programme.
Russian wheat export in 2018-19 “look like being close to” this season’s figure, which the influential analysis group forecasts at 36.8m tonnes,
“Accounting for the harvest, and carry-in stocks, it looks like we will have at least similar supplies for export next season,” at some 97m-98m tonnes, Andrey Sizov Jr, SovEcon managing director, told Agrimoney.
The upgrade to the 2018 output forecast reflected ideas of a winter which was Russia’s third warmest on record, and showed conditions “generally favourable for winter crops”.
Satellite data show that the condition of winter crops in Russia’s South, a key source of wheat for export, is “significantly above the average long-term level”, and also better than a year ago, SovEcon said.
The Moscow-based group trimmed by 1 point, to 5%, its forecast for losses to winterkill of winter crop overall.
Winter wheat area, after frost losses, was pegged at 14.5m hectares, while SocEcon held at 2.85 tonnes per hectare for now its yield forecast.
Spring crop prospects
SovEcon also flagged a promising start for spring crops in Krasnodar and Stavropol, in Russia’s South, where plantings are just beginning.
“Moisture reserves in the surface layer of soil are at the average levels for recent years, conditions are generally favourable for the beginning of sowing,” the group said.
SovEcon estimated wheat export prices as of last week at $208 a tonne, down $1.50 week on week, with the reflecting “high competition between Russian wheat supplies”.
With merchants taking margins of up to $10 a tonne on wheat shipments of late, above typical margins, “we believe that Russian wheat exporters can cut prices further if needed”, the analysis group said.