Last September, we turned a lot of heads with our headline on Russian wheat production. Today, we check in on Russia’s huge production rise, the nation’s incredible surge in exports, and what it means for wheat prices moving forward.
Platts reported Monday that Russia’s wheat exports since the beginning of this marketing year hit 28.397 MMT. That figure is a 40.5% increase from the previous year, according to the nation’s agriculture ministry.
By the end of the year, they anticipate that wheat exports will hit about 38 MMT.
Brennan noted on March 18 that Russia is off to a huge start for the year.
Typically, Russian exports don’t hit their stride until the second half of the year.
In 2016/17, the 72.5 MMT of wheat production was about a 20% jump from the previous marketing year. That record surpassed the 61 MMT during the 2015/16 marketing year.
This year, total wheat production is poised to come in at 85 MMT.
Here’s the thing, another bumper crop is likely on the way. Not only has more temperate weather helped during the winter months, but the higher mercury reading on the thermometer has created conditions for another robust wheat crop in 2018/19. SovEven has raised its forecast for 2018 to 77.6 MMT.
SovEcon has predicted we’ll see about 97 to 98 MMT in available supply when we combine the 2017/18 carryover and 2018/19 harvest output, as Lucia explained this week
This mountain of the available crop will create a difficult outlook for Russia’s export rivals. The company will engage in a controversial export subsidy program this summer and continue to flood the global market with low-quality wheat to capture market share.
Russian wheat exports up 40.5% year on year to 28.4 million mt
Russian wheat exports since 2017-18 marketing year started on July 1 were 40.5% higher year on year at 28.397 million mt, data from the ministry of agriculture showed Monday.
Around 38 million mt of wheat was expected to be exported by the end of the campaign, according to sources, a record for a marketing year.
Wheat line-ups each month remained fully booked, sources said.
Prices for 12.5% protein wheat on an FOB basis reached a 34-month high of $209/mt recently on tight prompt supply and high replacement costs.
Prices were said to have peaked, according to sources, as improving weather should facilitate slicker transhipment from central regions to the south of Russia.
Russian exporters have also shipped 3.561 million mt of corn in the current marketing year, down 1.1% year on year on delayed loadings and forecasts of a smaller crop, although up 0.4 percentage point in the past two weeks as buyers seek alternatives to expensive barley imports.
Barley exports totaled 4.158 million mt, up 90% year on year but only a touch higher in the past two weeks on tight supply.