Russian wheat prices up on worsening crop outlook

Russian wheat prices rose last week due to a worsening outlook for the country's crop

  
Combines harvest wheat in a field near the village of Kruglolesskoye in Stavropol region, Russia June 26, 2018. Image used for illustrative purpose.

Combines harvest wheat in a field near the village of Kruglolesskoye in Stavropol region, Russia June 26, 2018. Image used for illustrative purpose.

REUTERS/Eduard Korniyenko

MOSCOW- Russian agriculture consultancy Sovecon said on Monday it had cut its forecast for Russia's 2021 wheat crop by 5.9 million tonnes to 76.4 million tonnes.

Sovecon, one of the leading agriculture consultancies in Moscow, said it downgraded its forecast as Russia's statistics service reported the pre-harvest winter wheat area at 15.6 million hectares last week versus the 16.8 million hectares Sovecon previously estimated. 

"Typically, the market underestimates Russia's winter wheat area. This year is not the case – the winter-kill was above all expectations resulting in an unexpectedly small pre-harvest winter wheat area despite mild winter," Andrey Sizov, the head of Sovecon, said in a note.

Russia is the world's largest wheat exporter, supplying it mainly to Africa and the Middle East. It has been hit by dry weather in several regions this year where farmers are currently harvesting their grain.

Hot and dry weather in July was an additional factor behind the forecast downgrade as it affected yields of spring wheat and, in some cases, of winter wheat, Sovecon said.

"Winter wheat yields are below expectations in the Centre and the Volga Valley. Outlook for spring wheat yield in the Volga Valley has worsened, especially in the eastern part of the region where moisture reserves were the lowest in a decade," Sovecon added.

IKAR, another Moscow-based consultancy, cut its forecast for Russia's 2021 wheat crop by 3 million tonnes to 78.5 million tonnes due to low yields in the Central and Volga regions on Friday. 

(Reporting by Polina Devitt; editing by David Evans; Editing by Bernadette Baum) ((Polina.Devitt@thomsonreuters.com))


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