Soggy soils in Ukraine and Russia | Seeding problems could spark demand for Canadian wheat
Wheat planting problems in the Black Sea region have lifted futures values for the crop, says an analyst.
“The market is starting to pay attention to what’s happening next year,” said CWB weather and crops specialist Bruce Burnett.
Next year country in Ukraine and Russia’s Volga region is not looking promising because wet weather has significantly delayed planting of the winter wheat crop.
“The chance of having a crop as large as this year has probably diminished quite significantly be-cause of those planting issues,” said Burnett.
Analysts are already pencilling in smaller Black Sea wheat crops compared to the estimated 22 million tonnes harvested in Ukraine and the 54 million tonnes in Russia this year.
“With how wet it has been over there lately, we could see 2014 production down to about 15 million tonnes for the Ukraine and about 42.5 million for Russia,” said Alex Bassett, a broker with Allendale Inc.
Those hefty shortfalls, if realized, would send wheat business to North American exporters.
“They’ve been very competitively priced compared to the U.S. and a lot of people have been turning to the Black Sea region, just because they’ve been so much cheaper,” he said.
“With these (seeding) issues, that could restore some demand for the U.S. market and the Canadian market.”
Burnett believes Allendale’s estimate of Ukrainian production is feasible, but he doubts Russia’s crop will take that much of a hit because growers there have the option of replacing lost winter wheat acres with spring wheat.
“To do that much damage to the Russian crop would be, probably at this juncture, a stretch,” he said.
Drew Lerner, president of World Weather Inc., said rain fell “abundantly and persistently” in northern Ukraine and Russia’s upper and middle Volga River basin in mid-September. The region received 25 to 75 millimetres of rain.
It was the second major rainfall in the area since the summer harvest began.
The rain was followed by a period of cool weather, in which temperatures were 6 to 10 C below normal. It prevented the water from evaporating and kept farmers off their fields during an important period for fall seeding.
The weather improved in early October, allowing farmers to re-sume fieldwork. Lerner said conditions could turn cool again starting Oct. 17.
Burnett said it wouldn’t bode well for crop development and survival.
“If the cooler than normal temperatures continue and winter does set in, then definitely you would see a lot of winter kill this year,” he said.
Lerner believes 10 to 15 percent of the winter wheat crop won’t be planted, mostly in the Russian portion of the waterlogged region.
It is a far cry from an earlier estimate provided by the Ukrainian Agrarian Confederation, which said Ukrainian farmers would be unable to seed more than 60 percent of the expected 17.3 million acre winter wheat crop.
“The 60 percent figure is way overdone. There’s no way we’re going to leave 60 percent of the crop out of the fields,” said Lerner.
Burnett said farmers still have plenty of time to seed in the southern portion of Russia and Ukraine’s winter wheat growing areas, where planting can continue into the first half of November.
“In some of the northern grain growing areas, we’re certainly out of the optimum planting window and we’re into the will-the-crop-survive planting window,” he said.
Ukrainian farmers had planted 8.9 million acres of winter wheat as of Oct. 7, down from 14 million the same time last year.
Russian farmers had planted 22.7 million acres of all winter grains as of Oct. 9, down from 35.6 million acres the same time last year.
Burnett said the Black Sea crop is the second major wheat crop available for export in 2013-14, next to the U.S. hard red winter wheat crop.
“It is a very important area in terms of price determination,” he said.