Friday, 19 January 2018

Russian government approves organic farming bill

This week Russia approved the draft federal law developed by the Ministry of Agriculture on the production of organic products.

During the approval process, Dmitry Medvedev, who chaired the process, noted the world market of organic products is experiencing rapid growth and Russia can take 10 to 25% of this market.

The bill introduces the basic concepts, determines which products have the right to be called organic, as well as the principles of production, and the powers of government bodies and local government.

The Minister of Agricultural, Alexander Tkachev, said "Over the past 15 years, the world organic food market has grown almost five times to $100 billion, and today it is 10% of the total world food market.  According to experts' forecasts, by 2022 the market of organic products will exceed $200 billion."

He also said "We have a sort of natural competitive advantage because in the 1990's, fertiliser applications significantly decreased, and part of the agricultural land has completely ceased to be processed.  A considerable amount of land has been formed, which meet the requirements of organic farming. In fact, Russia is a world bank for ecologically clean land."

Even so, presumably that land would still need to be determined to be eligible to produce products that have the right to be called organic by, for example, a two-year conversion period?

Thursday, 18 January 2018

USDA FSU December weather summary

Western FSU
Unseasonably warm, wet December weather was mostly favourable for dormant winter wheat.  Temperatures during the month averaged 3 to 7°C above normal, causing much of the region’s moderate to heavy precipitation (more than 200 percent of normal over large tracts of farmland) to fall as rain.  As a result, primary growing areas remained uncharacteristically devoid of a protective snow cover and subsequently vulnerable to temperature extremes.  Nevertheless, winter wheat entered dormancy in satisfactory condition in Ukraine and Russia.

Eastern FSU
Seasonably colder weather prevailed across the region.  During December, temperatures averaged within 2°C of normal across central Russia and northern Kazakhstan.  The snowpack remained relatively shallow (less than 10 cm) over northwestern Kazakhstan and Russia’s Urals District, while snow coverage and depths increased elsewhere in northern Kazakhstan and central Russia.  Farther south, colder- and drier-than-normal weather prevailed over Uzbekistan, slowing winter wheat growth but maintaining higher-than-normal irrigation demands.

This week's Black Sea agribusiness news in brief

Snow spreading across parts of Russia, in particular southern central regions, reports of roads blocked due to heavy snow fall in Stavropol; the cold weather is unlikely to be an issue that far south, but snow will help replenish soil moisture reserves.

Ukraine saw a light dusting of snow this week, not enough to offer much protection if temperatures drop and unlikely to last long as temperatures are forecast to rise again by the weekend.

UkrAgroConsult forecast Ukraine’s wheat output will fall about 4% to a four-year low this year because winter sowings are vulnerable to winterkill.  The consultancy forecast a 2018 harvest of 25.1 million tons. 

I’ve had discussions with my farming contacts around Ukraine and we don’t agree with this; crop condition is good, in October we scored 97% of crops satisfactory or above and nothing has happened to reduce this.  Sure, crops are currently at elevated risk, but risk doesn’t necessarily mean it will happen, plus soil moisture is good, the hectares are there so why would yield drop? 

I will publish our initial forecast next week which we will update after the first crop tour scheduled for March when we will have a much better picture.

Grain Market Daily from AHDB report that following the release of multiple USDA reports last Friday global wheat markets have fallen and a larger US winter area than the market had expected and upward revisions to global 2017/18 production have pressured prices.

Bloomberg report soaring oil prices have caused the rouble to jump to a seven-month high, making Russian grain more expensive for overseas buyers.  To counter higher currency-related costs, exporters typically cut prices paid to farmers, the thinking then goes that rather than accept lower rates, growers will hold onto supplies in the hope that prices rise.

The counter to that was highlighted by Russia’s Minister of Agriculture who reported this week that the 2017 record grain harvest of 134 million tonnes will allow exports up to 45-47 million tonnes of grain.

Russia’s Ministry of Agriculture report 1.2 million hectares of sugar beet was harvested, 9% more than in 2016, producing at total of 48.2MMT, up 15% on the average yield for the period 2012-2016 although down on last year’s 51.3MMT crop.

Last Friday, the Wall Street Journal reported that, due to low prices and large stockpiles, American farmers are cutting wheat plantings. The current crop is expected to be the smallest since 1909.

And finally, Ukraine immigration officials now require a fingerprint scan as part of their biometric data collection at border crossings; I'm already looking forward to what will undoubtedly be a seamless and rapid process.

Wednesday, 17 January 2018

Russian winter crops; 95% in good condition

Earlier today, the Russian minister of agriculture, Alexander Tkachev, addressed the Federation Council on "Preparing for Spring Field Work in the Russian Federation".

The minister reported that 17.1 million hectares of winter crops have been planted (17.3 million hectares in 2016) and 95% of those crops are in good condition.  

Back in October 2017 we travelled across Russia to assess the condition of wheat and scored 98% of crops satisfactory or good* so it looks like we agree.

The minister went on to stress the importance of maintaining the growth rate of agroindustry, in line with government policy of greater agriculture output.

Tkachev mentioned bringing land that was in long term fallow or had been abandoned, back into production and said that in 2017 the sown area exceeded 80 million hectares, returning un-cropped agricultural land back into production was a priority and that in 2018, the sown area will increase by at least 200 thousand hectares.

The minister said that the 2017 record grain harvest of 134 million tonnes will allow exports up to 45-47 million tonnes of grain.

"Since the beginning of the agricultural season, 28 million tonnes of grain have already been exported, which is 35% more than last year. Export of wheat grew by one third to 22 million tonnes” noted the minister.

To support Russian farmers, the minister highlighted the recently launched grain transport subsidy so that not only the South of Russia, but also Siberia, Volga region, Urals, and Central Russia could supply grain to foreign markets.

The minister went on to say that he was confident that Russia will firmly consolidate the status of the world's largest wheat supplier.

(*Our November 2017 Russian and Ukraine crop tour report is still available, drop me a line if you would like to buy copies, priced £100).

Thursday, 11 January 2018

This week's Black Sea agribusiness news in brief

Mild temperature continues to reduce snow cover across Russia and Ukraine.

Reuters report "Chicago wheat slid on Monday, on track for its biggest three-day fall since mid-December, although worry over lack of protective snow cover in the United States and Russia limited decline."

Russia’s Ministry of Agriculture report the first 100,000MT of grain has been transported at a reduced rate in accordance with the new policy on subsidising grain rail transport and included grain from Novosibirsk (52KMT), Omsk (35KMT), Orenburg (3 KMT) and Tambov (9KMT).

Russia’s Ministry of Agriculture report the sowing of winter crops for the harvest of 2018 is 17.4 million hectares, which corresponds to the same level as last year.

Russia’s Federal Service for Hydrometeorology and Environmental Monitoring report winter crops are in good and satisfactory condition on an area of 16.24 million hectares (95% of the total sown area).

The Deputy Minister of Agriculture gave insight into Russian agricultural policy yesterday when he said, "We face a serious challenge - not only to maintain the accelerated pace of development of the agrarian sector, but to provide conditions for its further growth.”

Eastern Europe’s largest biogas plant has opened in Western Ukraine, the Khmelnytskiy plant will convert manure, corn silage and sugar beet pulp into 15.6 mw of electricity, enough to power 16,000 households in the region.

Ukraine’s first solar plant located in the Chernobyl exclusion zone is to go on stream within weeks; the one-megawatt, 1.6ha site can cover the needs of a medium-sized village although plans are to eventually produce 100 times this.

The Times report Russian gas imported to Britain last year could be going to America as freezing weather in the US send prices soaring; a tanker carrying liquefied natural gas from storage facilities in Kent appeared to be heading to Boston, although its destination could yet change

The Ukrainian weather centre report that due to the influence of the Arctic air, the air temperature in Ukraine will gradually decrease starting from the beginning of the week.

Quote of the week; Benjamin Bodart from @CRMagri discussing this year’s wheat export market, "More than one in three tonnes exported in the world will be from the Black Sea region.”

Thursday, 12 October 2017

Latest USDA weather update for western FSU

Rain in the north contrasted with increasingly dry weather in key southern winter wheat areas. 

A storm system tracked across the northern tier of the region, producing a large area of moderate to heavy rain (10-35 mm) from Belarus and northern Ukraine into northern Russia. 

The wet conditions slowed or halted small grain and summer crop harvesting but maintained favourable soil moisture for winter crops. 

However, the region's primary winter wheat areas — which extend from southern Ukraine into Russia’s Southern District — reported little (if any) rain. 

Dryness has been particularly acute in Krasnodar Krai (southwestern Southern District), where the last significant rain was September 7. 

Rain will be needed soon to ensure proper wheat establishment before seasonally colder weather arrives.

Latest USDA weather update for Europe

Wet, cool weather prevailed over much of the continent, though heat and drought persisted on the Iberian Peninsula. 

A series of Atlantic storm systems paraded eastward across the continent, producing a large swath of moderate to heavy rainfall (5-50 mm, locally more) from England and France into Poland and the Baltic States. 

Later in the period, a stalled frontal boundary over the southern Balkans triggered 15 to 60 mm of rain from Croatia into the lower Danube River Valley. 

The widespread rainfall was beneficial for winter crop establishment, though corn and sunflower harvesting was delayed by the wet conditions.  

Temperatures from France into Poland and the Balkans averaged 1 to 3°C below normal, though there were no season-ending freezes reported. 

In contrast, dryness and heat (31-36°C) accompanied the start of Spain’s cool wet season, which marked the second consecutive year the Iberian Peninsula began the typically wet autumn and winter growing season mired in drought. 

While it is still early in Spain for barley and wheat (typically planted in November), water supplies and soil moisture remained very limited following last year’s drought and this past summer’s excessive heat.

Wednesday, 4 October 2017

Latest USDA weather update for western FSU

Dry albeit chilly weather promoted fieldwork but further reduced soil moisture for winter wheat establishment. 

An area of high pressure initially over northwestern Russia drifted westward, bringing sunny skies and cooler-than-normal temperatures (up to 4°C below normal) to much of the region. 

As a result, summer crop harvesting and late winter wheat planting proceeded without delay. 

However, soil moisture was in very short supply for wheat establishment, particularly from southern and eastern Ukraine into southwestern Russia. 

Despite the drier weather pattern, variable early-week showers (1-25 mm) in central and western Ukraine slowed soybean maturation and harvesting.

Latest USDA weather update for Europe

Drier weather returned to eastern Europe, while showers arrived in western and northern growing areas by week’s end.

A large area of high pressure over western Russia early in the period drifted westward, bringing drier conditions to most major growing areas from the Baltic States into the northern and central Balkans.

The respite from recent heavy rain allowed summer crop harvesting and winter crop sowing to resume.

However, light to moderate showers (3-20 mm) lingered in southern and western Poland and surrounding environs, further delaying fieldwork in these locales.

Likewise, moderate to heavy rainfall (10-75 mm) in the southern Balkans interrupted summer crop harvesting.

By week’s end, a strong cold front generated widespread showers (5-50 mm) from France and the United Kingdom into Germany, maintaining favourable moisture supplies for wheat and rapeseed establishment.

Meanwhile, dry conditions lingered in Spain and Portugal; cool-season rain typically commences on the Iberian Peninsula in late-September and early October, and rain will be especially welcome following this past year’s drought and heat.

Friday, 21 July 2017

The latest Black Sea Crop Tour is about to hit the road

Next week we will be driving across Ukraine and Russia assessing the current wheat harvest and adjusting our forecast if necessary.

At the same time, we will look at the condition of the spring planted crops, in particular, corn, to see how they are holding up so far and adjusting our forecasts there if required.

We will tour again in August to update our view on corn, sunflower and soya ahead of harvest.

During each tour we will post pictures, video and commentary on our dedicated tour Twitter account and follow up with a report of our findings including our latest yield forecasts.

We charge a reasonable £350 for this service which takes us through to the end of the year when we finish off the season with a final look at wheat to check out how well it has established and how it will stand up during the winter.

It’s a bit like having your own guy on the ground but at a mere fraction of the cost and you don’t have to fill out a risk assessment.

Drop me an email if you think this is something that might be of interest to you.

Thursday, 20 July 2017

Russia harvests 22 million tonnes of grain

As of July 19, Russia harvested 5.1mha producing 22.5mmt of grain with an average yield of 4.43mt/ha.

At the same point last year, farmers harvested 7.1mha collecting 29.3mmt of grain with an average yield of 4.15mt/ha.

Canola stands at 700,200 hectares harvested producing 2.8mmt with an average yield of 2.05mt/ha.

Early potatoes harvest is 87,100mt at a yield of 25.4mt/ha.

Sign up to our crop tour service to receive up to date, independent information on the cereal harvest and forecasts on late spring crops prospects.

Wednesday, 19 July 2017

Estonia takes over EU Council presidency

On July 1, Estonia took over the rotating EU Council presidency for the first time ever.

With the exception of Foreign Affairs, Estonia will now schedule and chair all ministerial meetings including agriculture.

Estonian said they will focus on the future of the Common Agricultural Policy (CAP), based on the outcome of the public consultation launched by the European Commission on CAP reform.

What public consultation?  Did you hear anything about it?  I didn’t, while I admit I don’t read everything I should, I’m certainly not hiding under a rock when it comes to agriculture.

For the record, the consultation opened on 2nd February and closed 2nd May.

That was twelve weeks to spot a consultation on CAP was happening, twelve weeks to find out how to participate and twelve weeks to formulate a response.

The CAP is one of the EU’s longest-standing policies and is the only EU policy that directly affects every citizen of Europe yet twelve weeks was considered long enough for a public consultation.

The EU really needs to get off its high horse and start engaging with people otherwise Brexit might just be the start.

Russian cereal harvest will exceed 105mmt

Earlier today, Russia's Vladimir Putin heard a report on harvest progress and production forecast from the Minister of Agriculture, Aleksandr Tkachev.

The Minister reported on the completion of the plantings and an increase of 300,000 hectares on last year to 80 million hectares.

He also recalled low temperature in some regions delayed harvest by two weeks although the country's farmers have already collected the first 20 million tonnes of grain.

"If it is a warm and dry autumn, and we can complete the harvest of the Urals and Siberia at the optimum time, then the grain harvest will exceed 105 million tonnes or more” said an upbeat Tkachev.

The anticipated level of production and expected domestic consumption (70 million tonnes) will leave a surplus about 35 million tonnes for export said the Minister.

I’m now looking forward to Michael Gove’s equally upbeat and widely reported harvest report to Theresa May, any day now…

Russia harvests 15.9 million tons of forage

As of July 14, Russia had harvested 15.9mmt of coarse and succulent fodder (hay, haylage, silage) in all categories of farms.

This means large commercial farms and smaller private set-ups so the quality of that conserved forage will vary from very good to barely digestible.

The total demand for the 2017-2018 winter is estimated to be 30.1mmt.

Harvesting has not yet started in the Siberian and Far Eastern Federal Districts and I assume there will be further cuts of silage elsewhere.

Russian poultry production up 5.2%

Russia’s production of poultry for slaughter in live weight from January to June this year in farms of all categories amounted to 3.17mmt, which is 5.2% more than the same period in 2016.

The Ministry report that agricultural production increased by 5.4% and amounted to 2.99mmt which I take to mean commercial farms not including home reared birds.

If you ever get the chance to visit a village in Russia, one of the first things you notice is it’s basically one big petting zoo, there is livestock everywhere.

Egg production in all types of farms was 22.37 billion (+ 2.5%), and in commercial farms, 17.77 billion (+ 3.6%).

Tuesday, 18 July 2017

Latest USDA weather update for western FSU

Much-needed rain improved crop prospects in central and northern Ukraine, while conditions remained favourable for summer crops in Russia.

After a protracted dry spell during the spring and early summer across central and northern Ukraine, 10 to 70 mm of rain provided timely moisture for corn, soybeans, and sunflowers approaching or entering reproduction.

Similar rainfall amounts sustained good to excellent summer crop prospects in western Ukraine, while light to moderate showers (5-20 mm) in eastern Ukraine benefited budding sunflowers.

In Russia, light to moderate showers (1-20 mm) and near- to below-normal temperatures maintained excellent yield prospects for spring grains and summer crops approaching (north) or progressing through (south) the reproductive stages of development.

In western Russia, rainfall over the past 60 days has averaged 100 to 200 percent of normal, ensuring good soil moisture reserves for crop development, though the wet weather likely slowed winter wheat drydown and harvesting somewhat.

Elsewhere, light to moderate showers (2-20 mm) in Moldova were beneficial for reproductive corn, while moderate to heavy rain (10-50 mm) in Belarus eased short-term precipitation deficits and improved moisture supplies for flowering spring grains.

Untimely heat was not a concern, although spring grains and summer crops were developing two to three weeks behind average in west-central Russia (southern Volga and northern Southern Districts) due to the recent spell of cool, showery weather.

Latest USDA weather update for eastern FSU

Good to excellent conditions continued for vegetative to reproductive small grains and cotton.

In the spring wheat belt of northern Kazakhstan and central Russia, moderate to heavy showers (10-50 mm) were beneficial for reproductive spring barley (Volga and Urals Districts) as well as jointing to heading spring wheat (from northern Kazakhstan and environs into the Siberia District).

Meanwhile, sunny skies and seasonable heat (38-42°C) promoted the development of flowering cotton (which is heavily irrigated) in eastern Uzbekistan and Tajikistan.

Latest USDA weather update for Europe

Widespread rain further improved summer crop prospects over much of the continent, though excessive heat lingered in parts of southern Europe.

Early in the period, moderate to heavy showers (10-50 mm, locally more) from France eastward into Hungary, Poland, and the Baltic States maintained or improved soil moisture as small grains and summer crops approached or progressed through the reproductive stages of development.

The recent wet weather (near- to above-normal rainfall over the past 30 days) has eased or eliminated dryness concerns over most growing areas; moisture stress was limited to Belgium, southern portions of Spain and Italy, as well Serbia and western Romania.

However, heat continued to stress crops in southern Europe.

In southern Spain, daytime highs above 40°C adversely impacted reproductive to filling sunflowers and cotton.

In Italy, seven consecutive days above 35°C (beginning July 5) were untimely for tasselling to silking corn in the Po River Valley.

In southeastern Europe, widespread 35-degree heat (locally as high as 40°C) stressed reproductive corn and soybeans, particularly in the driest locales of the middle Danube River Valley.

(Next week I will be driving across much of Europe and hope to be able to give an independent summary on current crop condition).

Russia harvests 18 million tonnes of grain

As of July 17, Russia harvested 4.2mha producing 18.8mmt of grain with an average yield of 4.46mt/ha.

At the same point last year, farmers harvested 5.9mha collecting 24.5mmt of grain with an average yield of 4.19mt/ha.

Harvest continues in the Southern and North Caucasian Federal District and has now started some regions of the Central and Volga federal districts.

Sign up to our crop tour service to receive up to date, independent information on the cereal harvest and forecasts on late spring crops prospects.

Russia's 2018 agri budget to remain at 2017 levels

Russia’s Minister of Agriculture, Aleksandr Tkachev, took part in a meeting on agro-industrial and fishery federal budget spending for 2018-2020, chaired by Prime Minister Dmitry Medvedev.

Medvedev noted that the agricultural sector of the economy is on the rise and not only increased the level of food security, but also began to increase the supply of export of agricultural products.

He also noted that budget spending on agricultural sector support in 2018 may remain at the level of the current year. 

Ukraine grain yield down but quality up

As of July 18, Ukraine’s early grain harvest stands at 10mmt of grain from 3.1 million hectares (32% of the planned 9.4mha), with an average yield of 3.26mt/ha.

This breaks down like this:
  • Wheat - 5.6mmt, 1.6mha (25% of 6.3mha), average yield of 3.47mt/ha.
  • Barley - 3.7mmt, 1.2mha (48% of 2.5mha), average yield of 3.17mt/ha.
  • Peas – 617,000mt, 260,000ha (66% of 392,000ha), average yield of 2.37mt/ha.
Before you ask, no, we don’t have comparable data for last years as the ministry didn’t publish anything but they are saying the moisture deficit in June has reduced yields slightly.

They are also saying the quality of grain from the southern region is good with preliminary estimates saying the share of Class 1-3 for wheat could reach 50 to 70%.

Who's in charge at Ukraine’s Ministry of Agriculture?

Back in May, Ukraine's Minister of Agriculture, Taras Kutovyi announced his resignation online (Ukraine's Minister of Agriculture resigns).

He has been in the post 13 months and said he was leaving to focus on attracting investment in Ukraine.

At that time Parliament said his resignation was to be authorised and a successor announced.

Six weeks later and no successor has been announced, Kutovyi is still down on the website as the Minister although, as far as I can tell, hasn’t been visible since submitting his resignation with all new announcements made by various deputy Ministers.

I say “as far as I can tell” because the Ministry of Agrarian Policy and Food of Ukraine’s website is going so slowly that it's all but not working and has been like that for weeks now.

All this at a time when Ukraine, the worlds number six wheat exporter and number four corn exporter started harvest and about when they usually sign a memorandum with the leading grain exporters agreeing the amount of grain that can be exported this year.

How long does it take to appoint a new Minister, is there something going on in Ukraine’s Ministry of Agriculture that we should know about?

(Update to this story, as if by coincidence Ukraine's Ministry of Agriculture have just announced a tender to develop a website.)

Monday, 17 July 2017

Russia harvests 14 million tonnes of grain

As of July 14, Russia harvested 3.2mha producing 14.4mmt of grain with an average yield of 4.46mt/ha.

At the same point last year, farmers harvested 4.3mha collecting 18.2mmt of grain with an average yield of 4.25mt/ha.

Sign up to our crop tour service to receive up to date, independent information on the cereal harvest and forecasts on late spring crops prospects.

Ukraine harvest 6.5 million tonnes of grain

Ukraine’s harvest stands at 6.5mmt of grain from 2.0mha with an average yield of 3.18mt/ha.

Ukraine are a bit rubbish at providing regular harvest information so I am currently looking at a few other sources but the yield this year is down on last year when it was running at about 3.7mt/ha.

This includes 3.1mmt of wheat from 0.90mha (14%) with an average yield of 3.42mt/ha and 2.96mmt of barley from 0.93mha (38%) with an average yield of 3.16mt/ha.

The latest USDA forecast trimmed one million tonnes off the wheat crop bringing it down to 24mmt, I dropped our forecast 1.2mmt last week on the back of lower planting figures to 26.5mmt.

We are planning to be in Ukraine next week to assess the condition of the cereal harvest and to update our forecast if necessary. 

We will also be looking at corn, sunflower and soya and will be adjusting our forecast there if required.

Email if you would like to subscribe and receive our results, at only 350 quid it’s significantly cheaper (and safer) than trying to do it yourself.

Russia warns New Zealand of restrictions to dairy products

Russia is warning of potential restriction to New Zealand dairy products after butter tested positive for the antibiotic tetracycline, saying if they continued to find the antibiotic, it would limit the supply of milk products from New Zealand. 

Not the first time NZ have dropped the ball when trading with Russia.

In February this year, Russia banned NZ beef after the bacteria Listeria and the feed additive ractopamine was found in beef and beef offal (Russia ban NZ beef).

Back then the NZ authorities appeared to be caught off guard and sounded like a bunch of whining children saying they were “mystified” and that “NZ food standards are among the highest in the world.”  

Clearly, the Russians think otherwise.

Russian agri-news in brief

According to the Russian Federal Customs Service, Russian exports of agricultural products (excluding trade with the EAEC) increased by 18% for the first six months of 2017.  

Cereals accounted for 37.1% of the total exports, including wheat at 27.7%. 

As of July 13, the total volume of issued credit to Russian farmers for seasonal field work rose to 167 billion roubles, 6.2% more than in the same period last year.

According to the Russian Ministry of agriculture, farmers have accumulated 11.9% more fertiliser than last year.

The gross yield of Russian greenhouse vegetables was up 24% to 476kmt, including 350kmt of cucumbers (+21%) and 119kmt of tomatoes (+42%) which pretty much describes the standard Russian salad.

Friday, 14 July 2017

Russia harvests 12 million tonnes of grain

As of July 11, Russia harvested 2.7mha producing 12.2mmt of grain with an average yield of 4.39mt/ha.

At the same point last year, farmers harvested 4.0mha collecting 16.8mmt of grain with an average yield of 4.23mt/ha.

Harvest is running about a week behind last year in terms of hectares cut, but if you ignore the different start date, the harvest is on track and yield and output are both slightly ahead of last year.

I have written a brief update on the Russian-Ukraine harvest (email for a free copy), in it I said it will be a brave analyst who calls H17 more than H16 and that no one seems prepared to break ranks and go public with a big number.

The next day the USDA went public with a big number and increased their latest Russian wheat forecast by a whopping 3.0mmt to 72mmt, the same as last year’s record crop.

While their forecast doesn’t exceed last year’s crop, I’m starting to think it is only a matter of days before someone does.

For the record, back in early June, we pegged Russian wheat at 70.1mmt, this week we increased that 1.0mmt on the back of finalised planting numbers.

In about ten days we will start touring Russia and Ukraine again with a view to adjusting our forecast, be sure to sign up to access the full results.

Wednesday, 12 July 2017

Russia harvests nine million tonnes of grain

As of July 11, Russia harvested 2.1mha producing 9.1mmt of grain with an average yield of 4.41mt/ha.

At the same point last year, farmers harvested 3.2mha collecting 13.8mmt of grain with an average yield of 4.34mt/ha.

We are picking up on possible wheat quality issues and we will be touring again in about two weeks time.

Sign up to our crop tour service to receive up to date, independent information on the cereal harvest and forecasts on late spring crops prospects.

Latest USDA weather update for western FSU

Showers maintained favorable conditions for summer crops in Russia, while dryness returned to drought areas in north-central Ukraine. 

In Russia, moderate to heavy rain (5-50 mm) sustained good to excellent yield prospects for spring grains and summer crops, which were approaching (north) or progressing through (south) the reproductive stages of development. 

In Ukraine, light to moderate showers (2-24 mm) in southern and eastern portions of the country benefited flowering to filling spring grains as well as vegetative to reproductive sunflowers. 

In contrast, dry conditions (less than 5 mm) returned to north-central Ukraine, renewing drought concerns and lowering prospects for vegetative to reproductive corn and soybeans. 

However, the dry conditions were also accompanied by temperatures up to 3°C below normal, mitigating evaporative losses and crop stress somewhat. 

Elsewhere, locally heavy rain (10-45 mm) in southern Moldova boosted yield prospects for corn, while widespread showers (8-40 mm) in Belarus were beneficial for spring grains and oilseeds.

Latest USDA weather update for eastern FSU

Favorable conditions continued for vegetative to reproductive small grains and cotton. 

In the spring wheat belt of northern Kazakhstan and central Russia, widespread albeit variable showers (2-40 mm) were beneficial for reproductive spring barley (Volga and Urals Districts) as well as jointing to heading spring wheat (northern Kazakhstan and environs). 

Meanwhile, sunny skies and seasonable heat (38-42°C) promoted the development of flowering cotton (which is heavily irrigated) in eastern Uzbekistan and Tajikistan.

Latest USDA weather update for Europe

Widespread rain boosted summer crop prospects over much of the continent, with locally heavy downpours easing the impacts of recent heat in southern growing areas. 

Light to moderate showers (2-20 mm, locally more) maintained or improved soil moisture as crops such as corn, soybeans, and sunflowers approached or progressed through the reproductive stages of development from east-central France into Germany, Poland, and the Czech Republic. 

Somewhat drier conditions (2 mm or less) were noted in southern and northwestern France, southeastern England, northern Italy, and Hungary; in particular, dryness has adversely impacted vegetative to reproductive summer crops in northern Serbia and parts of Italy’s Po River Valley. 

More notably, pockets of heavy rain (25-100 mm) in central Spain and the lower Danube River Valley eased the impacts of last week's heat and boosted moisture reserves for reproductive corn, sunflowers, and soybeans. 

While temperatures over most of Europe averaged 2 to 5°C above normal, there were few concerns over heat stress with highs mainly in the lower to middle 30s.

Tuesday, 11 July 2017

USDA in Moscow increase Russian grain production forecast to 113mmt

The USDA Foreign Agricultural Service (FAS) in Moscow increased its total Russian grain production forecast by 3mmt to 113mmt.

This would make it the second highest grain crop in Russia’s post-Soviet period, second only to last years’ record grain crop of 119.4mmt.

FAS forecasts wheat at 68.0mmt (up 2.0mmt on their April forecast) and barley at 16.5mmt (up 0.5mmt).

The reason for the increased wheat and barley forecast is based on the reported good condition of the winter crops, which in the case of wheat is 65-70% of the total wheat crop, although winter barley is only 10-11% of the total barley crop.

The reported good condition comes from the Russian State Statistical Service (Rosstat) and as far as I can tell, no one from FAS has been out of the city limits to have a look at a crop.

They peg corn at 15.5mmt (up 0.2mmt) based on increased plantings; rye is 2.6mmt and oats 4.5mmt, both unchanged from April.

FAS forecasts grain exports in MY 2017/2018 at 38.0mmt, approximately 1.0mmt higher than their estimates for grain exports for last year which was the highest grain export estimate in Russian history.

The exports forecast include 28.0mmt of wheat, 3.3mmt of barley, 5.7mmt of corn, and 0.86mmt of other grains and pulses.

The attached picture is of our May/June team discussing the condition of crops in a field of corn in Novomikhalyovskoye, Stavropol Krai, Russia, who then went on to cover 2,500km crop touring through Russia and Ukraine.

Just saying.

Monday, 10 July 2017

Latest Black Sea crop prospects

Here are two reports from different sources on Ukraine weather conditions and crop prospects for the same week;
  • Showers maintained good to excellent summer crop prospects in Russia and eased drought in north-central Ukraine.
  • The weather conditions dominating Ukraine…were not very favourable for harvesting early cereals and growth and development of late crops.
Kind of a glass half full or half empty thing which for me only confuses the picture.

Heads-up then that we will be touring Ukraine and Russia later this month and during August, checking in on how the wheat and barley harvest is progressing, looking at the condition of corn, sunflower and soya and updating our yield forecasts.

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Russia harvested 9.7 million tonnes of animal fodder

As of July 5, Russia harvested 9.7 million tonnes of animal forage feed.

According to the Ministry, the total demand for coarse and succulent forage for next winter is around 30mmt.

So far 2.6mmt of hay has been harvested, 6.4mmt of haylage, and 611kmt of silage.

Russia doesn't make much silage relying instead on hay and haylage to feed the national herd, both of which have lower feed quality.

Russia to reduce dependence on imported lysine

Russia’s first deputy Minister of Agriculture continues to target import substitution at every opportunity, this time it’s the amino acid, lysine.

Lysine is an essential amino acid which must be included in pig and poultry feeds, without it the animal is unable to combine other amino acids correctly and growth rates drop.

The Minister said that the consumption of the essential amino acid increased due to the growth of poultry and pig production and in 2016 Russian producers used around 100,000 tonnes of lysine with 97,000 tonnes imported.

The Minister went on to say the challenge is to increase production and to orient livestock producers in the domestic consumption of lysine and it is necessary to develop measures to reduce dependence on foreign supplies.

The annual consumption of lysine is predicted to be about 2% per year up to 2020.

Monday's Black Sea agri-business news

Engie SA, the French renewable energy developer, is holding discussions with the Ukrainian government about the possibility of building a large solar farm project in the uninhabited radioactive zone that rings the Chernobyl reactor, which blew up in 1986.

Engie is one of 60 companies to have expressed an interest in developing some form of renewable generating capacity at the site.

The Chernobyl exclusion zone is about 2,600-square kilometre of radiated land and has been largely absent of human activity for 30 years.

New York Times are reporting comments made on Friday by Francis Malige, MD at the European Bank for Reconstruction and Development, that if Ukraine overhauled its land legislation it could unlock $50 billion of collateral for lending to the country's agricultural industry.

Malige said there were around 45 million hectares of agricultural land in Ukraine and even by assigning a minimum value to it, that would provide "$40-50 billion of collateral you can put into the system".

Actually, there’s about 32mha of arable land of which about 20mha is cropped by agribusiness, so that would raise about $22 billion.

Talking of Ukraine agribusinesses, Kernel agricultural holding increased its landbank to 600,000 ha of leasehold farmland after the acquisition of Ukrainian Agrarian Investment (UAI) and Agro Invest Ukraine.

Last week, Russia announced they had extended the ban on imports until 31 December 2018.
The ban is on the import of certain categories of agricultural products, raw materials and food from the US, EU member countries, Canada, Australia, Norway, Ukraine, Albania, Montenegro, Iceland and Liechtenstein.

The Russian minister of agriculture, Alexander Tkachev said he assumed the boycott will remain in force until at least 2020. 

Russia harvest four million tonnes of grain

As of July 7, Russia has harvested 933kha producing 4.1mmt of grain with the average yield of 4.44mt/ha.

This compares with 2.2mha in 2016 producing 9.6mmt with the average yield of 4.32mt/ha, so the pace of harvest is slower and early yield indications are lower.

Winter canola harvest stands at 28.5kha producing 54.7kmt with an average yield of 1.92mt/ha and 30.5kmt of early potatoes with an average yield of 22.26mt/ha.

Ukraine harvest two million tonnes of grain

As of July 7, Ukraine has harvested 683kha producing 2.1mmt of grain with an average yield of 3.10mt/ha; this represents 7% of the projected 9.4 million hectares and is made up of the following:
  • Wheat - 196,000ha (3% of 6.3mha) producing 615,000mt with an average yield of 3.14mt/ha;
  • Barley - 414,000ha (17% of 2.4mha) producing 1.3mmt with an average yield of 3.23mt/ha;
  • Peas - 73,000ha (19% of 383kha) producing 171,000mt with an average yield of 2.33mt/ha;
  • Canola - 41,000ha (5% of 821kha) producing 83,000mt with an average yield of 2.02mt/ha.
We don’t have much information on how this compares to last season as last year the Ministry didn’t release harvest data or released limited information infrequently, but looking back through my records I can see that as of 4 July the Ministry report 576kha of early grains and pulses harvested (502kha in 2015) so the pace of harvest is about the same.

Last year’s crop produced 2.0mmt with an average yield 3.5mt/ha (3.0mt/ha in 2015) so early overall yield indication are down although last year wheat was running at 3.7mt/ha and barley at 3.5mt/ha they are up.

Thursday, 6 July 2017

Latest USDA weather update for western FSU

Showers maintained good to excellent summer crop prospects in Russia and eased drought in north-central Ukraine. 

In Russia, 60-day rainfall through July 1 has averaged 100 to 200 percent of normal, ensuring adequate to abundant moisture reserves as spring grains and summer crops approached or entered the reproductive stages of development. 

During the past week, showers and thunderstorms continued in Russia, albeit more variable, with totals in key southern corn and sunflower areas ranging from a trace to 42 mm. 

Widespread moderate to heavy rainfall (10-90 mm) was reported from Belarus into northern Russia, sustaining abundant moisture supplies for crop development.

In Ukraine, much-needed rain (10-24 mm) in central portions of the country eased drought, though 60-day precipitation totals remained below 50 percent of normal in many key growing areas. 

Elsewhere in Ukraine, moderate to heavy showers (10-40 mm) improved prospects for soybeans and corn in the west as well as vegetative sunflowers in east- central growing areas. 

Dry weather lingered over south- central Ukraine, increasing concerns over developing drought in areas just inland from the Black Sea Coast. 

Despite the much-needed rain in Ukraine, building heat (33-36°C) increased evapo-transpiration rates and largely offset the benefits of the past week’s rain.

Latest USDA weather update for eastern FSU

Favourable early-season conditions continued for vegetative to reproductive small grains in the north and cotton in the south. 

In the spring wheat belt of northern Kazakhstan and central Russia, dry, cool weather (up to 2°C below normal) was beneficial for heading to flowering spring barley (Volga and Urals Districts) as well as jointing spring wheat (northern Kazakhstan and environs); as of July 1, these same locales have reported 100 to 300 percent of normal precipitation over the past 60 days. 

In Russia’s Siberia District, well-placed showers and thunderstorms (10-60 mm, locally more) eased or eliminated short-term dryness and improved prospects for jointing to heading spring grains. 

Meanwhile, seasonably dry weather and near-normal temperatures (within 1°C of normal) promoted the development of flowering cotton (which is heavily irrigated) in eastern Uzbekistan and Tajikistan.