October 29, 2010

Russia's winter grain crops may be affected by weather

Russia agriculture minister has warned that extreme drought that ravaged its grain crop this summer could also affect production during the winter season.

Russian farmers were expected to plant about 15.5 million hectares of winter grain crop this year, down from earlier forecast of 18 million hectares, said Elena Skyrnnik.

Earlier, Prime Minister Vladimir Putin said Russia had extended its grain export embargo until July but said the country has enough grain to meet its own needs.

Wheat futures surged to two-year highs in early August, almost doubling from June lows, as a drought devastated Russia's harvest including the highly productive Black Sea region and the country announced a sudden grain export ban.

At a USDA meeting in Chicago, the agency's World Agricultural Outlook Board chairman, Gerald Bange, said there is a need to keep a close eye on that Black Sea region because a second consecutive drought could turn the region, a key world grain exporter, into a net importer.

The concerns over Russia's winter crop come in the wake of adverse weather hitting wheat crop in two of the world's leading exporters, the US and Australia, which pushed the Chicago Board of Trade futures <Wc1> up for a fourth straight session on Wednesday (Oct 27).

The US and Australia are projected by the USDA to export roughly 50 million tonnes of wheat in the current (2010-11) marketing year, or nearly 30% of the total world exports of nearly 175 million tonnes.