SovEcon upped its wheat exports forecast by 1.6 MMT to 37.9 MMT in 2020/21 (July/June).
The increase in the wheat exports forecast is due to the high current export pace ahead of taxes. January 2021 exports are estimated at 3.3 MMT (+57% YOY), a record volume for the month. The first wheat tax (25 EUR/MT) kicks in on February 15.
An additional factor is the expectation of more active exports in the last months of the season, based on the scenario that the authorities will announce the introduction of a floating tax from July 2021. This is likely to increase the supply in the current season as farmers will lose the incentive to store wheat till the new season.
In 2019/20 Russia, the top wheat exporter, shipped abroad 34.9 MMT. In November 2020, before the tax news, SovEcon estimated 20/21 exports at 40.8 MMT.
Not a game-changer, but slightly bearish wheat. Russia still has some grain to sell in the current season despite all restrictions imposed by its government.
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