SovEcon, the leading Black Sea agricultural markets research firm, cut Russia’s wheat export estimate in 2021/22 by 1.3 MMT to 37.1 MMT. Russia is the #1 world wheat exporter.
The estimate was cut reflecting a smaller crop forecast, which was lowered from 84.6 MMT to 82.3 MMT earlier in July (see here).
An additional factor is a sluggish export at the beginning of the season. July exports are estimated at 1.9 MMT (-19% YOY) which is the lowest level since July-2017. The harvest campaign has been lagging due to the rainy weather and late planting. The weekly-adjusted export tax remains an additional hurdle.
Domestic wheat market is relatively firm despite the new harvest pressure and large carry-in. Many farmers still prefer to postpone sales hoping that the current export tax could be lifted in several months
In our view, this looks like wishful thinking but it does slow down exports. USDA’s estimate of Russia’s 21/22 wheat exports is 40 MMT.
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