Russia's wheat, corn harvest estimate increases

by World Grain Staff
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WASHINGTON, D.C., U.S. — The U.S. Department of Agriculture (USDA) and Foreign Agriculture Service (FAS) reported on Oct. 26 that Russia’s grain harvest is estimated at 102 million tonnes, up 5 million tonnes from the July forecast.

The grain crop forecast includes 60.5 million tonnes of wheat (4.5 million tonnes higher than the July forecast), 16.5 million tonnes of barley (no change), 12.5 million tonnes of corn (up 0.5 million tonnes), 3.3 million tonnes of rye (up 0.2 million tonnes), 4.8 million tonnes of oats (down 0.2 million tonnes), 0.7 million tonnes of milled rice (1.06 million tonnes in rough weight – no change), and almost 3.5 million tonnes of other grains and pulses.

FAS increased its forecast compared with the July 2015 forecast based on better than previously forecast harvest for both wheat and corn crops:

• The wheat crop is higher than previously forecast due to a larger harvested area that more than compensated for the yields that are somewhat smaller than last year. Conditions for wheat harvest were favorable almost all over Russia. However, yields are down in the Volga Valley and in some provinces of the Central Federal District (FD) due to spring and summer dryness.
• The area sown to corn was larger than last year, and so far yields of corn this year have been higher than last year. However, as of Oct. 23, farmers harvested only 1.9 million hectares, or 67% of corn area, so any snowfall in Central European Russia in late October could ultimately impact total yields.

The FAS forecasts grain exports in market year 2015-16 at 31 million tonnes, only 3% lower than the record 32 million tonnes exported in market year 2014-15, but higher than in any other marketing year in Russian history. The export forecast includes 23.5 million tonnes of wheat, 3.5 million tonnes of barley, 3.5 million tonnes of corn, and approximately 0.6 million tonnes of other grains and pulses. Wheat comprises the major portion of grain exports, and because of the good crop, wheat exports in market year 2015-16 may reach the highest level in the Russian history. The Russian government softened the terms for calculation of the floating export duty on wheat, and this also may stimulate Russian traders to increase wheat exports. In the beginning of October, Russia also increased the price offered for purchases of grain to the State Intervention Fund. However, intervention purchases based on the new prices have not yet begun and industry analysts estimate that these new prices may influence only wheat from markets in the Ural and Siberian regions, where it is difficult for farmers to gain access to foreign markets.

Russian market year 2015-16 grain exports will also be influenced by external factors, such as global grain market prices and fluctuations in the Russian ruble to U.S. dollar exchange rate, which are not considered in the FAS forecast. Assuming grain exports at 31 million tonnes, FAS forecasts feed consumption of grain at 35.5 million tonnes, 0.5 million tonnes higher than in market year 2014-15, and food, seed and industrial consumption of grain at 36 million tonnes, a 2% increase from last year. End of year grain stocks are forecast at the same level as last year.

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