Russia loses 15% of its wheat harvest

The US Department of Agriculture has sharply reduced forecasts for grain harvests around the world against the background of weather disasters that have covered the planet from Eurasia to America, reports finanz.ru.

The harvest in Russia will amount to 72,5 million tons and will be 15%, or 12,5 million tons below initial estimates, according to the monthly report of the department, published on Thursday.

There has not been such a sharp one-time drop in ratings for Russia for many years, notes Andrey Sizov, head of the analytical center SovEkon.

Expectations of the new wheat harvest have fallen sharply in recent weeks after Rosstat published unexpectedly weak data on areas under winter wheat: from last year's 16,9 million hectares, they fell to 15,6 million.

An additional factor is unfavorable weather conditions, Sizov points out: dry and hot weather negatively affected the prospects of spring and, partly, winter wheat yields, which especially hit such large producing regions as Tatarstan, Bashkortostan and Orenburg with their record low moisture reserves.

The forecast for the export of Russian grain was reduced by 5 million tons to 35 million tons.

Even more strongly - by 24% - the US Department of Agriculture reduced the forecast for the wheat harvest in Canada, where scorching heat and drought caused hundreds of forest fires and destroyed crops in the "golden belt" on both sides of the border with the USA.

In British Columbia, due to fires, thousands of railway cars transporting grain for export were idle for weeks, and farmers had to sell undergrown crops for cattle feed due to the withering of crops under the scorching sun.

In the States themselves, the harvest will be the worst in the last 19 years, the Ministry of Agriculture predicts. The situation is exacerbated by the fact that world wheat reserves are significantly lower than expected — 279 million tons against the consensus forecast of 288 million tons.

Against the background of the release of the report, wheat futures on the Chicago Stock Exchange jumped by 4,4% and almost renewed a 9-year high, reaching $7,59 per bushel.

In Russia, 4th class wheat rose by 550 rubles to 13375 rubles per ton last week, and since the middle of July, quotations have already increased by 11%, notes SovEkon.

"Prices are growing rapidly throughout the country, which was due to high demand from exporters and processors. Against the background of the dynamic growth of the market, many sellers refuse to fulfill existing contracts, which forces some buyers to raise prices even more actively," Syzov states.