Russian 2018 grain crop estimate slashed by forecasters

MOSCOW — Leading Russian agricultural consulting firms SovEcon and IKAR have cut their estimates for the country’s 2018 grain harvest due to cold wet conditions in the key spring wheat regions of Siberia and the Urals.

Russia, which gathered a record grains harvest of 135 million tons in 2017 due to favorable weather, is one of the world’s largest wheat exporters and is also an important producer of barley and corn.

SovEcon said on Saturday it had downgraded its forecast for the 2018 grain crop to 119.6 million tons from 126.2 million tons previously. The consultancy cut its outlook for wheat output by 3.9 million tons to 73.1 million tons.

IKAR said on Friday it had reduced its forecast for grain production to 114.7 million tons from 117 million tons previously. Its estimate for the wheat harvest was trimmed by 2 million tons to 71.5 million tons.

Despite this year’s poorer harvest outlook, Russia will have large stocks left from last season’s bumper crop once the 2018/19 marketing year starts on July 1.

The carry-over stocks will help Moscow keep exports high even if the 2018 crop is smaller, the agriculture ministry has said.

Russia usually exports grain to customers in Africa and the Middle East from farming regions around the Black Sea and the Azov Sea, far from Siberia and the Urals.

However, the two regions currently affected by chilly, rainy weather account for about 60 percent of Russia’s spring wheat crop, which totaled 24 million tons in 2017, SovEcon said in a note.

And while they are not crucial for overall exports from Russia, they are important for balancing supply and demand.

Citing the probability of poor crop yields due to the climate conditions, SovEcon reduced its estimate for Russia’s 2018 spring wheat crop to 19.1 million tons from 22.2 million tons previously.

“The key revision reason is very unfavorable weather in Siberia and the Urals in May. Too cold and too wet – poor yield is on cards for the region,” it added.

It also trimmed its estimate for Russia’s winter wheat crop by 800,000 tons to 54 million tons but said that it could upgrade it later if warm weather favors the Volga region.

It also played down industry concerns about dry weather in Russia’s export-focused southern regions, which mainly produce winter wheat, saying they were doing relatively well despite some issues in parts of the Krasnodar and Stavropol regions. —