June 26, 2024

Commodity analysis firm cuts Russian wheat output forecast to three-year low

Commodity analysis firm Argus has reduced its forecast for Russian wheat output this year to a three-year low of 79.5 million metric tonnes, a significant decrease of nearly 12 million tonnes from 2023, attributed to dry weather and late frosts impacting crops in the world's largest wheat exporter, Reuters reported.

The revised forecast includes 56.6 million tonnes of winter wheat production, based on a yield of 3.65 tonnes per hectare. This estimate follows a virtual crop tour in the southern and central regions of Russia, according to Argus.

This forecast is lower than those of leading Russian analysts Sovecon and Ikar, which estimate Russia's wheat harvest at 80.7 and 82 million tonnes, respectively. The US Department of Agriculture has also adjusted its projection to 83 million tonnes.

"The unfavourable weather — persistently dry conditions and late frost episodes — has rapidly reduced winter wheat yield potential in the southern, Volga, and central regions of the country," Argus stated.

However, some regions such as Krasnodar and Stavropol were largely unaffected by frost damage. Additionally, recent favourable rains in central Russia, another key winter wheat-producing region, suggest that winter wheat production losses may be more moderate than initially anticipated.

Argus forecasts Russia's spring wheat production this year at 22.8 million tonnes. With the spring wheat harvest beginning in several weeks, Argus notes that the total wheat production forecast for Russia, excluding Crimea, could still be subject to further changes.

-      Reuters