Market Morsel: Nice summer for a tan, not for wheat.
SovEcon, a leading Black Sea agricultural markets research firm, has cut 2021/22 Russian wheat crop estimate from 76.2 mmt to 75.4 mmt on low spring wheat yields.
During the very dry and hot summer in the Urals and the Volga Valley suffered badly, the production forecasts have been cut by 0.3 mmt to 2.5 mmt and by 0.9 mmt to 10.9 mmt respectively.
For the Urals, it could be the lowest crop since 2012, and for the Volga Valley – since 2014. Both regions received only 50-80% of normal precipitation during the last three months while temperatures were 3-5C above average.
This was partly offset by marginally higher estimates for the Center, the South, and Siberia.
With ¾ of Russia’s wheat area harvested, the Siberian crop is the only big unknown variable at this stage. We expect the region to harvest above-average crop thanks to good weather conditions in the summer’s second half, offsetting earlier dryness.
USDA estimates the Russian crop at 72.5 mmt (ex.Crimea, which according to SovEcon could produce around 0.8 mmt). Russia’s AgMin keeps its forecast unchanged at 81 mmt since May. Russia is #1 world wheat exporter.
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