29 May 2024 | 14:05 UTC

Russia's 2024-25 wheat crop forecast reduced on greater-than-expected frost damage

Highlights

Weather to remain hot, dry over next two weeks

Reduced wheat output raises global supply concerns

Ukraine's wheat crop forecast down to 19.1 mil mt: UGA

Getting your Trinity Audio player ready...

Cold weather followed by frosts in recent weeks in Russia have caused severe damage to winter wheat crops, resulting in lower estimates for the 2024-25 harvest.

Industry analysts have revised down 2024-25 wheat crop estimates several times in May.

SovEcon, a Black Sea agricultural market research firm, cut its Russian wheat crop forecast for the third time on May 28 to 82.1 million mt, saying frosts caused greater-than-expected damage to winter wheat crops. Its May 15 forecast was 85.7 million mt.

SovEcon managing director Andrey Sizov said: "Current weather conditions remain challenging for the new crop. Many critical winter wheat regions, including Rostov, the leading wheat grower, are still too dry ... Meanwhile, Siberia, the top spring wheat producer, is too wet to complete the planting campaign within the optimal time frame."

Similarly, Russia's agricultural consultancy the Institute of Agricultural Market Studies, or IKAR, on May 21 cut its wheat crop forecast for the third time to 83.5 million mt from 86 million mt on May 13.

S&P Global Commodity Insights has also lowered its Russian 2024-25 wheat production forecast to 85 million mt due to frost damage, down 5.6 million mt from the previous estimate.

Russia's winter wheat production was estimated at 60.8 million mt, down 6 million mt from the previous forecast, while spring wheat output was forecast at 24.2 million mt, up 0.4 million mt due to a larger estimated area.

Dry weather in April and frosts in May have hit winter crop (wheat and rapeseed) conditions in southern Russia.

Some 1.5 million hectares of crops in Russia were damaged by bitter frosts this spring, and the total figure may rise to 2 million hectares, President of Russia's Grain Union, Arkady Zlochevsky, said May 27.

The agriculture ministry does not plan to revise its forecasts for the grain harvest or exports but may announce a country-wide emergency over the frost damage to crops, agriculture minister Oksana Luth said. Declaring an emergency can help farmers with insurance claims.

Weather in Russia is likely to remain drier over the next two weeks, indicating a drought-like situation.

"In a few days, temperatures are expected to rise by 2-5 C above normal," Sizov said.

Russian wheat prices have hit a four-month high amid weather and crop concerns. Prices began to rise in March 2024, after hitting the lowest level since 2020. Platts, part of S&P Global Commodity Insights, assessed Russian wheat 12.5% FOB Black Sea at $246/mt on May 28, unchanged day on day.

Reduced Russian wheat output amid deteriorated crop conditions has also fueled supply concerns in the global market as Russia is the largest wheat exporter in the world.

IKAR estimated Russia's 2024-25 wheat exports at 45 million mt, down from its last estimate of 47 million mt.

Commodity Insights estimated Russian wheat exports for 2024-25 at 48 million mt.

Ukraine forecast cut

Weather issues have also been creeping into neighboring Ukraine, where grain union Ukrainian Grain Association lowered its 2024-25 grain and oilseed crop forecast to 74.6 million mt from the 76.1 million mt projected in March.

Ukraine's wheat crop harvest was forecast at 19.1 million mt while exports are estimated at 48 million mt in 2024-25, according to the association.

Commodity Insights estimated Ukraine's wheat production at 22.5 million mt and exports at 14.5 million mt in 2024-25.


Editor:

Register for free to continue reading

Gain access to exclusive research, events and more

Already have an account?Log in here