IKAR in Mass and Industry Media

SovEcon lifts Russian wheat forecast

Agrimoney.com

SovEcon upgraded its forecast for Russian wheat production by 1.5m tonnes, as a spell of dry weather allows harvesting to pick up pace.

The agricultural consultancy saw Russian wheat production at 57.5m tonnes, while it raised its forecast for overall grain production by 1m tonnes.

By the end of July, Russian farmers harvested 37m tonnes of grain, said SovEcon, accounting for 24% of the total area.

Improving prospects

The SovEcon forecasts are the latest upward revision to Russian wheat hopes, after Russian agricultural minister Alexander Tkachev said on Monday that favourable weather conditions could help Russia's grain harvest reach 101.5m-102.0m tonnes.

Speaking on a phone conference with the Russian Prime Minister, Mr Tkachev maintained a forecast for this year's total grain forecast at 100m tonnes, but said that favourable weather could increase that figure by 1.5m-2m tonnes.

Mr Tkachev forecast Russian wheat production at 58m tonnes, with corn production at 12m tonnes, and estimated domestic annual grain demand at 20m tonnes for food and 40m tonnes for animal feed.

Last week the US Department of Agriculture's Moscow bureau forecast Russia's total grain harvest at 97m tonnes, an upgrade of 5m tonnes from its previous forecast, with the wheat forecast upgraded by 3m tonnes to 56m tonnes.

On Friday, the International Grain Council saw Russian wheat production at 55m tonnes.

Harvest lifts exports

The recent pick up in harvesting will help to improve the pace of Russian exports, after rain caused delays earlier this year.

Together with export duties designed to protect Russian consumers from the inflationary cost of sanctions and weak rouble, the weather pushed wheat exports to a 6-year July low, of just over 2m tonne, of which 1.3m tonnes was wheat.

But SovEcon sees the recent harvest progress helping August grain exports to reach more normal levels, in excess of 3m tonnes.

Prices fall

The pick-up in harvesting appears to be weighing on Russian wheat prices.

Ikar, a Russian agricultural consultancy, on Monday cut its estimate of the Russian wheat price by $3 a tonne from last week, to $188 a tonne.

Meanwhile, SovEcon quoted Russian wheat prices at $192.5 per tonne, in line with its estimates last week.

04.08.15

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