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.