The wheat crop in the Black Sea region is in good shape heading into winter, which is creating the prospect for another big crop in 2017.
The region produced a record 114 million tonnes of wheat this year because of good spring and summer growing conditions.
UkrAgroConsult is forecasting 54.1 million tonnes of Black Sea wheat exports in 2016-17, up 12 percent from the previous year.
Last year’s winter wheat crop got off to a poor start as farmers seeded into dry conditions, but crop prospects improved greatly because of a mild winter and good spring rainfall.
Fall soil moisture conditions were much improved this year, which prompted farmers in Russia to plant more winter wheat.
Russia’s agriculture ministry is forecasting 42.85 million acres of winter grain, a six percent increase from last year.
The ministry does not specify how much of that is wheat, but SovEcon estimates that 86 to 87 percent of the winter grains crop has been wheat the last two years.
SovEcon says the condition of winter grains is significantly better than the average of recent years in most of Russia’s southern and Volga regions.
Bruce Burnett, weather and crop specialist with G3 Canada, was a little more subdued in his assessment of the crop.
“The crop is off to a reasonable start,” he said.
Burnett said the increase in winter wheat acres will come at the cost of spring wheat acres. Winter wheat typically delivers twice the yield of spring wheat, so there is potential for another bumper crop.
“It’s probable they’ll get up to the same type of production levels they had this year and with good growing conditions it could be higher.”
Neil Townsend, senior market analyst with FarmLink Marketing Solutions, said it has been very cold in Ukraine, which could hurt some of the late-seeded winter wheat.
However, he has observed over the last three or four years that wheat can overcome poor conditions.
“We’ve seen an amazing resilience there. The general story out of Ukraine has been the crop has surprised to the big side,” he said.
“The only acre with no potential is the unplanted acre.”
Townsend has no problem believing reports of bigger winter wheat area in Russia. It has become a significant cash crop for farmers because exporters are eager to get their hands on American currency due to Russia’s faltering ruble.
Burnett does not anticipate an increase in overall global wheat production despite good prospects in the Black Sea region because he expects smaller crops in the U.S and the European Union.
He also said Black Sea wheat does not typically compete with Canadian wheat in many markets with the exception of Asia.
He said exports from the region have been strong this year, but they needed to be because of a disappointing European crop.
UkrAgroConsult reports that Ukraine boosted exports by 13 percent in the first quarter of 2016-17, while Kazakhstan is expected to increase its annual export program by 15 to 20 percent.
Russian shipments are behind target because of an unexpected late-season drop in quality, Egypt’s concerns about ergot content and the Russian government postponing its decision on scrapping the wheat export duty.
Townsend said the brisk Black Sea export program is forcing Russian prices higher as exporters try to lure more wheat from farmers.