Russian Grain Union Raised Grain Export Forecast to 47-48 million tons !!!

During a major press conference, President Vladimir Putin recalled that the Soviet Union has always been an importer of grain, and now Russia is the world’s largest exporter of wheat. “We are number one. We went around both the United States and Canada. They have more production, but they consume more, and we produce so much that it allows us to take first place in the international market for the sale of wheat, ”he said.

According to the FCS, on December 12, since the beginning of the season, grain exports amounted to 22.1 million tons (excluding data on mutual trade with the EAEU member states in October and November). According to the Rosselkhoznadzor, based on the issued phytosanitary certificates, by December 10, 23.8 million tons of grain and leguminous crops were exported (taking into account deliveries to the CU countries). This is 3.7 million tons or 14% less than the same period last season.

In the second half of the season, we can expect an increase in the pace of export of wheat and barley compared to the previous marketing year, told Agroinvestor»Head of the Modeling and Forecasting Department of the Center for Agricultural Analytics of the Ministry of Agriculture Rudolf Bulavin. “According to our estimates, in January-June 2020, 2.4-2.7 million tons more can be exported than in 2019,” he said. “In general, for 2019/20, the export of grain and leguminous crops may reach 44-46 million tons (44.44 million tons last season), including wheat – 34-35 million tons (35 million tons last agricultural year).” Now, the export rates of wheat and barley from the main competing countries significantly exceed their export potential, and in Russia, on the contrary, current export is lower than the potential. In the second half of the season, the competitiveness of Russian wheat and barley will increase, which will lead to an increase in supplies, Bulavin commented.

Russian Grain Union( RZS) also awaits the activation of shipments. On December 6, at the Agroholdings of Russia conference, Union Vice President Alexander Korbut said that this season our country can export about 46 million tons of grain , despite the fact that export rates are now lower than in 2018/19. Now the union has revised its forecast. “We raised the forecast for the export potential of grain this season to 47-48 million tons,” Agroinvestor told»Director of Analytical Department, RZSElena Tyurina. “We did not change the estimate of wheat exports, it remained at the level of 35.5 million tons, the growth in supplies to foreign markets will be due to the growth in shipments of barley and corn.”

Analytical Center Rusagrotransa”Predicts that this season, taking into account the export to the EAEU countries, the export of grain and leguminous plants will be at the level of 44 million tons, including about 34 million tons of wheat. Deliveries to Kazakhstan and the EAEU are estimated at 1.86 million tons, says Igor Pavensky, head of the center. In December, grain export may remain at the level of November, when it amounted to 3.03 million tons, including 2.39 million tons of wheat.

“So far, we expect that this season the export of wheat will be 33.3 million tons, and the total export of grain and its processed products – 43.3 million tons,” said the director of the analytical center SovEcon»Andrey Sizov. “Now our forecast for wheat exports is 1.7 million tons less than that of the US Department of Agriculture, while we do not exclude that our estimate may be lowered.” The fact is that grain prices in the country are relatively high, and it is not easy to sell for export: the main shipments now come from the South, where stocks are declining and already noticeably lower than last year, he explains. At the same time, other regions that could be a source of supplies in the second half of the season are uncompetitive in price – it is there above export parity. “In general, we assess the grain supply and demand balance this season as very tense, and grain stocks, especially wheat, as historically low, so we have every million tons of grain on our account,” Sizov said.

Bulavin names several factors of a possible increase in grain export. So, in Argentina, export duties on corn, wheat, sorghum, oilseeds of sunflower and barley increased. “With insurance against higher export duties, traders in Argentina have already contracted more than 8 million tons of wheat from their export potential of 11.5 million tons,” he says. – An increase in duties, on the one hand, will contribute to an increase in export prices for both Argentinean wheat and the wheat of other exporting countries in winter and spring, and on the other hand, will lead to a reduction in sowing area in 2020 and a decrease in Argentina’s crop and export potential. “. Also, for the first time in many years, Iran entered the grain market with wheat purchases and signed a memorandum with Kazakhstan and Russia on the supply of up to 3 million tons of wheat. “According to the trading sources,

Official export of Russian wheat to Kazakhstan may exceed 0.4 million tons, Bulavin continues. “The high demand from Kazakhstan is associated with a decrease in the volume and quality of wheat crops there,” he said. In addition, the removal of trade restrictions on the export of American agricultural products to China will favorably affect the general atmosphere of world trade and reduce its uncertainty. “If a new agreement is concluded, it will significantly increase demand and prices for American soybeans and corn, and in the chain it will support world prices not only for these commodity items, but also for wheat,” he says.

Another possible factor for export growth in the spring is a decrease in forecasts for the world’s wheat crop in 2020, which may cause an increase in demand in May – June. In France, in particular, due to prolonged rains, winter wheat sowings for the 2020 crop decreased by 5% compared to the level of 2018 and to the average for the last five years. In addition, the state of crops is worse than last year, the same picture is observed in the United States. In Russia, as Alexander Korbut previously estimated, the condition of winter crops is brilliant, losses are insignificant, and crops have grown: according to the Ministry of Agriculture, winter crops occupied 18.2 million hectares compared to 17.6 million hectares for the 2019 crop. According to Korbut, next year we can get a good harvest and stable prices in the second half of the 2019/20 season. Chances are they will not fall after

True, Bulavin also draws attention to the current ruble appreciation, which is not conducive to export growth. According to the analytical center ” Rusagrotrans“, Purchase prices for wheat (12.5% ​​protein) in deep-sea ports fell by 250 rubles. up to 12.7-13 thousand rubles / t without VAT. Export prices for wheat for delivery in January last week increased by $ 1.5 per ton to $ 213-214 / t. The benchmark for February is $ 215 / t. According to Pavensky, supply prices for January are higher – $ 218-220 / t. According to the Ministry of Agriculture, as of December 12, the average Russian prices for wheat of the 3rd class amounted to 10.6 thousand rubles / t, the 4th – 9.95 thousand rubles / t, the 5th – 9.2 thousand rubles ./t.