Russia Set for Second-Biggest Wheat Crop Amid Decade-Low Prices
By Anatoly Medetsky
(Bloomberg) -- As world wheat prices languish near decade lows, Russia looks set for another bumper crop.
Planted wheat has survived most of the cold season without major damage, suggesting the harvest may be the second biggest on record for the world’s top exporter of the grain, according to early estimates by researchers.
Farmers may gather 67 million metric tons, according to market researcher UkrAgroConsult. The Institute for Agricultural Market Studies, or Ikar, pegs the crop at 67.5 million tons. Those would be the second largest after the estimated 73.3 million tons gathered last year.
Wheat prices traded in Chicago have fallen for the past four years amid bumper crops around the world and last year touched the lowest since 2006.
“Winter crop-loss forecasts do not exceed 3-5 percent for now,” Kiev-based UkrAgroConsult said in a report Tuesday. “Although this winter is colder than a year ago, it features mostly sufficient snow cover.”
Snow helps to insulate young growth from winter frosts, and the researcher’s estimate of dead plants compares with an Agriculture Ministry figure of 3.4 percent as of mid-April last year. Russia typically gets about two-thirds of its wheat from winter planting.
UkrAgroConsult’s crop estimate is based on average yields in the previous three years and an assumption that the area planted for all wheat, including the variety to be seeded in the spring, will expand 1.5 percent from last year to 28.1 million hectares. That would be largest since 2009, when it reached 28.7 million hectares, according to its report.
The estimate also takes account of the risk that a lack of moisture in the spring, when plants pass through an important stage of development, may reduce yields, Marina Sych, an analyst at UkrAgroConsult, said by phone. If there’s enough rainfall, yields have the potential to be bigger, she said.
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