October 1, 2010

Russia's gross grain crop shows 33.5% decrease

Devastated by a severe drought, Russia had harvested 59 million tonnes of grain in bunker weight by September 29, down 33.5% from a year ago, Agriculture Ministry data showed.

Russia's worst drought in more than a century has sparked a rally in global grain markets, pushing wheat prices to their highest level in two years in August after Moscow banned exports of the commodity.

The ministry said in a statement late on Wednesday (Sep 29) drought had killed grains on 13.2 million hectares, or 30% of total area sown with grains for this year's harvest.

Grains had been threshed on 31 million hectares, or 87% of the total harvesting area by September 29, the ministry said. It did not provide year-ago comparisons.

By September 30 last year, farmers had harvested 88.8 million tonnes of grain from 36.8 million hectares, or 80% of the total harvesting area. Average yields declined this year to 1.9 tonnes per hectare from 2.41 tonnes per hectare a year ago.

Russia expects to harvest a little more than 60 million tonnes of grain this year by clean weight, down from 97 million in 2009.

Bunker weight in the last several years averaged 6% higher than clean weight, obtained after grain has been cleaned and dried. But the difference can be smaller in hot and dry years like this one.

Farmers had harvested 39 million tonnes of wheat by September 29, down 30.2% from the 55.9 million tonnes reaped by September 30 last year. Wheat had been threshed on 19.7 million hectares, or 88% of the total harvesting area. Corn crop rose to 1.8 million tonnes from 627,000 tonnes as corn harvesting started earlier than last year.

Global wheat production looks set to fall this year, but a rise in stocks following the two largest wheat harvests in history in 2008 and 2009 should help keep a lid on prices.