Very dry and extremely warm weather in the Black Sea region not only makes the harvest run smoothly, it also lowers the yield. As the combines progress with their work, the balance can also be made up. More and more analysts are lowering their numbers.
The influential analyst firm SovEco has sharply lowered their revenue forecast on Monday, July 8. For the 2019/2020 season, it currently expects a wheat yield of 76,6 million tons, compared to more than 80 million tons previously. This means that the volume available for export decreases from 37,6 million tons to 33 million tons. Last season, 35,2 million tons of wheat were exported.
Volume of wheat considerably lower
The positive thinkers recently talked about a volume of up to 85 million tons, but the lowest estimates are now already at 65 million tons. The exact yield remains to be seen for a long time, but it is clear that it will be (considerably) lower. The later winter wheat crops and summer grain in particular are affected by the persistently dry weather. The dry weather also has a negative effect on crops in Ukraine.
Thanks to this persistently dry weather, threshing of winter wheat is going smoothly. The companies that have few storage options are now making offers. This is particularly the case in Romania, which has a downward effect on prices. Despite the news about the grains in Russia, the price drops slightly to $193 per tonne FOB. Those of barley increased slightly.
Quality an issue
Russia is an important player on the global market; especially since wheat with a high protein content is in high demand this season. These levels are lower this year than last year. The protein levels in wheat are also disappointing in France, which affects the export position. The European Commission is leaving its export figures unchanged for the time being. Reports of the first wheat yields in France are average to good. 25% of the winter barley has now been harvested.
In Russia, almost 20 million tons of grain have now been harvested, with an average of 4 tons per hectare. Cooler weather is forecast in the Black Sea region over the next 2 weeks, with occasional showers. However, the question is whether this rain will come in time for some areas. Summer grain in particular can still benefit.