Russian wheat production is exceeding previous expectations, with the US Department of Agriculture predicting its crop to end up at a record 81 million tonnes.
In its latest World Agricultural Supply and Demand Estimates report released overnight, the USDA increased its forecast of the Russian wheat crop by 3.5 million tonnes from its August estimate due to “excellent growing conditions”.
Putting it into perspective, Russian production is now double that typically produced 15-20 years ago and well above the previous record of 72.5 million tonnes set only last year.
It was the major factor in the USDA’s global wheat production estimate being raised by 1.7 million tonnes to 744.9 million tonnes.
Global ending stocks were cut by 1.5 million tonnes to 263.1 million tonnes but still remain the highest on record.
The department cut Australian wheat production by one million tonnes to 22.5 million tonnes and the European Union crop by 700,000 tonnes to 148.9 million tonnes.
All other estimates remained largely unchanged.
The USDA’s forecast for the Australian harvest is still well above the Australian Bureau of Agricultural and Resource Economics and Sciences’ estimate of 21.6 million tonnes, released yesterday.
Rabobank said, with the northern hemisphere harvest largely complete, the trade focus would turn to marketing the crops and winter plantings.
The bank said global trade flows would be dictated by currency, with a weaker US dollar putting American and Black Sea wheat in the most competitive position.
“If these market conditions continue, we would expect to see both the US and Russia maintain the majority shares in the export market,” it said.
“Euro denominated wheat remains price out of the market.”
(Source – http://www.weeklytimesnow.com.au/agribusiness/cropping/usda-wasde-report-lifts-russian-wheat-harvest-by-35-million-tonnes/news-story/c197eb534667830ebf68790673a683ee)