SovEcon lowered Russian wheat production forecast

The drop in wheat production could result from adverse weather conditions in the Volga Valley, Siberia, and the Urals.

The forecast for Russian wheat production has been reduced to 86.8 million metric tons (MMT) from the previous estimate of 88.0 MMT, according to a report from SovEcon. The drop in wheat production could result from adverse weather conditions in the Volga Valley, Siberia, and the Urals.

Over the past month, rainfall in these three regions has reached only 20-60% of the normal levels. As a result, moisture reserves in both the topsoil and subsoil are currently below average.

Using both satellite and meteorological data, SovEcon has determined that plant conditions in these three regions are subpar. Consequently, a decrease in yield appears possible.

The Volga Valley is the third largest wheat-producing region in Russia. Last year, its wheat output reached 22.5 MMT, accounting for 22% of the country’s total production of 104.2 MMT. The Urals and Siberia produced 4.6 MMT and 11.2 MMT of wheat, respectively.

However, despite the reduced production estimates, the projected yield for the new season remains 5% above the five-year average due to good crop conditions in the southern and central regions of Russia. SovEcon projects wheat production in these two regions – the country’s top two wheat producers – to total 37.5 MMT and 18.7 MMT, respectively.

Though the outlook for the new crop has worsened, it is not likely to significantly affect the market situation. Due to a record-high carryover wheat stocks in Russia, market supply will continue to be robust, with the new Russian wheat crop maintaining its influence on the global market.

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