Russian Agencies Cut Wheat Output Forecast Sharply
USAgNet - 08/05/2021
Leading Russian agricultural agencies have sharply revised down their forecast for the country's wheat output in marketing year 2021-22, driving up wheat prices and indicating tight global supplies could be in the offing.
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.
According to S&P Global Platts, 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.
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.
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