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Russia talks of record wheat crop while world mulls output fall

Russia could be on course for a record wheat crop this year, strengthening the role of the world’s biggest wheat exporter at a time when its invasion of Ukraine may help to trigger the first decline in global production since 2018-19.

The US Department of Agriculture projected a 5 million mt fall in global wheat production for the marketing year 2022-23 (July to June). Its World Agricultural Supply and Demand Estimates released May 12 showed global wheat output at 774.8 million mt.

Improved Russian yields

The USDA is expecting Russian production at 80 million mt for MY 2022-23, up from 75.16 million mt, with a 7% improvement in yield outweighing a small decline in the planted area. It expects winter wheat to represent just under three quarters of the upcoming crop. The winter crop for MY 2021-22 suffered high levels of winterkill as a result of ice crusting, but the USDA said that this was less likely to affect the upcoming crop since satellite images showed “minimal periods of freeze/thaw/freeze events.”

Prospects for the Russian crop were supported by favorable moisture in April, the USDA said, but it warned that “yield development will largely depend on May and June weather.”

The USDA’s estimate is below that of the Russian government, whose president Vladimir Putin on May 12 raised the prospect of a record crop in 2022, exceeding the 85.9 million mt from 2020. Putin told economic officials in Moscow that the government currently expects 87 million mt of wheat to be harvested.

This figure is similar to agricultural consultancy Sovecon’s estimate of 87.4 million mt in its April update. “Plants look good (almost) all over the country,” said its head Andrey Sizov.

The Russian government’s official numbers include the territory of Crimea, unlike the USDA’s. The Ukrainian government’s statistics also exclude Crimea and the conflict zones in the regions of Donetsk and Luhansk.

Ukraine’s wheat production to fall 35%

By contrast, the USDA forecast that Ukraine’s wheat production will fall to 21.5 million mt for MY 2022-23 from 33.01 million mt in the previous year. That reflects a 21% drop year-on-year in the harvested area and an 18% decline in the yield.

The country’s total planted area for wheat covers 6.84 million hectares and is most dense in the east of the country, where Russian troops are present. In the conflict areas, the USDA estimates that 30% of the crops will be destroyed or abandoned as a result of mines, bombing and fuel and labor shortages.

The USDA said that satellite imagery in autumn 2021 showed lower-than-average levels of green vegetation due to dryness in October when the crop was emerging. The department also said that it expects the deterioration in yield to follow a similar pattern set in 2020, when supply chain issues forced farmers to cut back on the use of mineral fertilizers in the pandemic.

Source: Platts

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