In this list
Agriculture

Russian agencies cut 2021-22 wheat output forecast sharply; exports far behind on year

Commodities | Energy | Energy Transition | Emissions | Oil | Crude Oil | Refined Products | Fuel Oil | Gasoline | Jet Fuel

How are rising prices and new green regulation impacting heating oil demand?

Energy | Electric Power

Platts Forward Curves – Gas and Power

Grains | Coronavirus | Agriculture

Grains and Oilseeds Conference (Part of Asia Agriculture Week)

Energy | Oil | Shipping | LNG | Refined Products | Energy Oil | Bunker Fuel | Fuel Oil | Marine Fuels

FEATURE: Singapore bunker market set to consolidate further amid fierce competition

Agriculture | Grains

Expectation vs reality: The case of the large corn crop that grew small in Brazil

Russian agencies cut 2021-22 wheat output forecast sharply; exports far behind on year

Highlights

Local agencies cut wheat output view by 3 mil-6 mil mt

2021-22 exports lag 34% on year during July

Export prices rise more than 10% over month

Leading Russian agricultural agencies have sharply revised down their forecast for the country's wheat output in marketing year 2021-22 (July-June), driving up wheat prices and indicating tight global supplies could be in the offing.

Not registered?

Receive daily email alerts, subscriber notes & personalize your experience.

Register Now

SovEcon has recently reduced its estimate for the country's wheat output in marketing year 2021-22 by 5.9 million mt to 76.4 million mt.

The estimate has been scaled down due to lower sowing of winter wheat and anticipated poor yields, the consultancy said.

"Typically, the market underestimates Russia's winter wheat area. This year is not the case – the winter-kill was above all expectations resulting in an unexpectedly small pre-harvest winter wheat area despite a mild winter," Andrey Sizov, the head of SovEcon, said in a note.

Hot and dry weather in July was an additional factor behind the reduction in the crop view as it is expected to affect spring wheat yields and some areas of winter wheat, according to the note.

"Winter wheat yields are below expectations in the Centre and the Volga Valley. Outlook for spring wheat yield in the Volga Valley has worsened, especially in the eastern part of the region where moisture reserves were the lowest in a decade," SovEcon said.

In the week to July 29, another Moscow-based consultancy IKAR also cut its forecast for Russia's MY2021-22 wheat crop by 3 million mt to 78.5 million mt due to expected low yields in the Central and Volga region.

S&P Global Platts Analytics has maintained its forecast for Russian wheat output in MY2021-22 at 83.8 million mt.

The Russian Ministry of Agriculture has maintained its forecast for production of wheat at 80.7 million mt in MY2021-22. In MY2020-21, the country produced 85.9 million mt of wheat, the ministry said.

Harvest Progress

Russia has harvested 47.4 million mt of wheat from the start of the MY2021-22 until Aug. 3, compared with 49.7 million mt during the same period last year, the Russian agricultural ministry said in an Aug. 4 report.

Farmers have so far threshed crop from 13.8 million hectares against 13.6 million hectares last year, the report showed.

As of Aug. 3, wheat yield is seen lower at 34.3 kg/hectare from 36.6 kg/ha during the year-ago period, according to the ministry.

Exports dwindling

Wheat shipments from Russia, the world's largest wheat exporter, have been lagging far behind over the year.

For the MY2021-22 season, wheat exports reached 1.7 million mt as of July 29, according to the Federal Center of Quality and Safety Assurance for Grain and Grain Products.

Wheat exports during July 1-29 were 34% lower compared with the same period last year.

So far, Turkey is the leading importer of Russian wheat, followed by Egypt. Turkey has bought 400,000 mt while Egypt has purchased 260,000 mt during July 1-29, agency data showed.

In the week to July 29, wheat exports were at 700,000 mt, compared against 600,000 mt in the previous week.

The US Department of Agriculture has pegged Russia's wheat exports were pegged at 40 million mt in MY2021-22 against 38.5 million mt estimated for last year. Platts Analytics sees Russian wheat exports at 40.5 million mt in the current marketing year against 38.2 million mt projected last year.

The Russian Agricultural Ministry has pegged the country's wheat exports in MY2021-22 at 37.6 million mt, largely unchanged from last year's shipments of 37.5 million mt.

Prices Rising

Concerns over a tight supply from the largest exporting country is also pushing up prices of Russian wheat over the past few weeks.

According to Platts assessments, the FOB price Russia's 12.5% protein wheat was at $262/mt on Aug. 3, up 10.1% from $238/mt a month ago.

However, prices had fallen to a steep low of $235/mt on July 13 as prevailing dry conditions led to quality concerns, traders said.

A decline in the floating export duty have also led to a recovery in prices over the past week as a lower duty also encourages outward shipments amid concerns of weak supplies, analysts said.

In the last week of July, Russia had cut the wheat export tariff by $3.80/mt to $31.40/mt for the period of July 28-Aug. 3.

The wheat export tariff was left unchanged at $31.40/mt for Aug. 4-10 period.