On-farm wheat sales in Russia increased by 8% to 3.5 million metric tons (MMT) in February, according to the Rosstat data processed by SovEcon. However, this contradicts the 23% MoM decrease in export sales for the same period. The contradiction may have resulted from higher sales expectations of Russian exporters.
It’s likely that exporters bought more wheat from local farmers to continue exporting at a high pace. However, the lower exports in February were contrary to their anticipations.
The crop estimate has remained unchanged from the February forecast. At the moment, the weather for the new crop is mostly favorable, with forecasters predicting temperatures 2-5 °C above normal until the end of March. Although there have been temperature fluctuations in the last months of winter, there is no ice crust on the fields as a whole.
SovEcon estimates February wheat exports at 2.9 MMT, which is 23% lower than the previous month. The exports were slowed by stormy weather in Novorossiysk, a key export port in Russia.
The record-high stocks are expected to support exports and sales in the domestic market in the coming months. According to Rosstat, on-farm wheat stocks in Russia were estimated at 17.4 MMT as of March 1, which is 82% higher than the five-year average.
The record-high stocks will continue to boost Russian wheat sales in both domestic and global markets, which, in turn, may put pressure on global wheat prices.
Follow the Black Sea grain market
Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and KazakhstanTry for free