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Volga Baikal AGRO News Update on the Latest Total Grain Harvest Output 2020 in the Russian Federation !!!
This year wheat harvest in Russia can reach 85 million tons.
Grain prices can start declining.
Wheat prices were significantly higher compared to the previous forecasts.
This year the wheat harvest can reach 85 million tons, which will be the second result after the 2017 record, when 85.9 million tons were harvested. About this the Director General of the Institute for Agricultural Market Studies (IKAR) Dmitry Rylko spoke during the online conference Pig Breeding 2020, organized by the National Union of Pig Breeders. Formerly IKAR predicted agricultural crop yield at 84 million tons. Analysts’ baseline forecast for grain harvest as a whole is 130.5 million tons, but the expert admitted that the final figure could reach 132 million tons. Potential grain supplies to foreign markets in the 2020/21 season IKAR estimates at 49.7 million tons, carryover stocks – at 11.3 million tons, including 9.5 million tons of wheat. In general, the grain balance this year is very favorable, Rylko noted.
However, the price situation this year differs significantly from the forecasts made earlier, Rylko noted. So, at the end of August, IKAR predicted that by December the price of wheat with 12.5% protein will rise to about $ 212 / t (FOB Novorossiysk) from $ 205 / t. However, the price went up sharply and exceeded $ 255 / t. According to the expert, this is due to the fact that, firstly, the EU and Ukraine harvested less wheat and corn than the market expected, and secondly, there is a new demand from China, which this year entered the world market “like an elephant to a china shop ”, and imports a record amount of corn, as it is actively restoring the number of pigs after outbreaks of African swine fever.
Rylko also noted the deterioration of the situation with logistics in Russia. The reason for this was tough measures to combat overloading in vehicles. As a result, restrictions have led to a serious rise in the cost of auto deliveries, and in a number of regions they have completely disappeared. “If earlier our vehicles transported grain for 1-1.2 thousand km back and forth, then this year road transport began to operate at shorter distances up to 400-500 km, which seriously affected the cost of transportation,” said the CEO IKAR.
In addition, the reason for the increase in wheat prices was the entry into the world market of speculative funds and the worsening of the weather situation, added Rylko. “Another important factor was the state of the ruble, which has fallen in price by about 30% since the beginning of the year. Naturally, this affected the price, ”the expert explained.
In mid-November, wheat prices reached a maximum of 18 thousand rubles. per ton, says Rylko, however, in the last two weeks in the South of Russia, they began to decline slightly. The same is happening in the central part of the country – the price of milling wheat has gone down, the price of feed wheat has frozen in place. “This is because the world price of wheat has not been growing for the last two weeks. There are even some signs of a slight decline by $ 1-2 / t. In addition, the ruble began to strengthen slightly, ”the expert commented.
A record sowing of all winter crops, especially wheat, took place in Russia this year, Rylko continued. “True, the situation with winter crops, including wheat, looks alarming, because along with the record sowing, we have a record share of bad and non-emerged crops in recent years,” the expert said. In 2020, it was 22% (4.28 million hectares) against 4% last year – this is the worst result in the last seven years, says Rylko. According to Roshydromet, by November 25, 78% of the crops (14.95 million hectares) were in good and satisfactory condition.
