September 6, 2012
Due to extreme dryness and heat which has affected key growing regions, Russia's 2012-13 wheat production is estimated at 41 million tonnes, lower than the country's drought-stricken harvest of two years ago.
According to the USDA's Moscow attache, the small crop is a major concern for domestic millers and exporters, with the total sown area almost two million hectares down on 2010 due to low prices at planting time, while yields in the breadbasket southern region and production of spring wheat in the Urals and Siberia are also thought to be comparatively lower.
The global grain market has been jittery in recent days as Russia decides how to cope with its drought-plagued harvest. Commerzbank said Tuesday (Sep 4) that the situation continues to cause confusion, with many sceptical of the government's repeated statements that it won't impose any export ban on wheat.
The confusion arises because Moscow-based think tank SovEcon has again lowered its crop forecast to 38 million tonnes, the bank said, just above Russia's own estimated demand, regardless of repeated large-scale exports to Egypt.
The fall in production and tight stocks are reducing exportable supplies, the USDA said, but high global grain prices are stimulating Russian traders to export as much as they can early in the marketing year because of uncertainty over the unfolding market situation.
Egypt's state-owned wheat buyer, the General Authority for Supply Commodities, made its biggest purchase of the year Saturday (Sep 1), which consisted primarily of Russian wheat.
The USDA lowered its forecast for Russia's grain exports to 11.5 million tonnes, compared to the record 28.1 million tonnes in 2011-12, with the total including eight million tonnes of wheat. AttachÃ© reports are not official USDA data, with the organisation currently pegging Russia's 2012-13 wheat production at 43 million tonnes.