SovEcon: Wheat crop forecast upped, but weather risks for the crop are growing

The forecast was increased due to favorable weather conditions over the winter, but the situation may change in the near future.

The forecast for the 2024 Russian wheat crop has been raised by 0.4 million metric tons (MMT) to 94.0 MMT, SovEcon said in its Crop Report. In 2023, 92.8 MMT of wheat was cropped. The forecast was increased due to favorable weather conditions over the winter, but the situation may change in the near future.

Throughout the winter, weather conditions for winter crops were favorable. Over the last three months, minimum temperatures were 2-3°C above normal in the Central region and 3-4°C above normal in the South and Lower Volga region.

Substantial precipitation allowed for significant snow cover in the Central and Volga regions and provided a high level of moisture reserves in the South.

The winter wheat production estimate was raised by 0.5 to 68.2 MMT. The spring wheat production estimate was lowered by 0.2 to 25.7 MMT.

In the last two weeks, crop conditions have deteriorated due to a lack of precipitation. The South received 40-60% of the normal precipitation levels, while the Central and Volga regions received 20-40%.

Based on satellite data, SovEcon notes a decline in crop conditions to an average level in the Rostov region and below average in Stavropol. In Krasnodar, crop conditions still significantly exceed the average level. The South is the number one wheat-producing region in Russia.

We believe that the good prospects for the new Russian crop are mostly reflected in global prices. Persistent dry weather may support the market in the future.

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