Grain markets are warned to pay close attention to the questionable start to the 2019-20 crop in Russia and Ukraine
There are mixed reports on the condition of this year’s Black Sea winter wheat crop.
“The soils in parts of Russia and Ukraine have been really fairly dry in the planting season,” said Bruce Burnett, analyst with MarketsFarm.
That is causing concern over crop establishment in the premier winter wheat growing region of the world.
“The emergence and germination are probably a little poorer than normal,” he said.
“I wouldn’t say that it’s a crisis or anything, it’s just something to keep an eye on.”
The dry conditions extend into eastern Europe, which is another important winter wheat growing area.
Burnett is not waving any red flags yet, but he thinks grain markets should be paying close attention to the questionable start to the 2019-20 wheat crop.
He believes acres in the Black Sea region will be similar to last year because prices are about the same.
Andrey Sizov, managing director of SovEcon, a Russian agricultural consultancy, agreed that seeded acreage in Ukraine and Russia will be similar to last year.
However, the pre-harvest acreage in Russia is anticipated to be record large because winter/spring winterkill was higher than usual last year.
Sizov differs a bit from Burnett on the early-season prognosis.
“Crop conditions are generally good in both countries despite relatively dry weather,” he said in an email.
“The precipitation was below normal but it was enough for crops in the early stage of development.”
Warmer-than-normal weather also caused fogs and dew, which provided some needed moisture and aided crop development.
“The only risk is a higher need for precipitation during winter/early spring to boost moisture reserves,” said Sizov.
Global Agricultural Monitoring’s November crop monitor report didn’t raise any concerns about crops in Russia and the European Union but it did express reservations about Ukraine.
“In Ukraine, winter wheat is under mixed conditions due to severe soil drought in the central part of the country, which along with the resulting delayed sowing has resulted in a lag in crop development heading into winter dormancy starting next month,” stated the report.
In the United States, slumping wheat prices will likely keep acres at a century-long low.
A Bloomberg poll of six grain market analysts is forecasting 31.12 million acres of U.S. winter wheat, a slight drop from last year’s 31.16 million acres. That would be the smallest crop in 110 years.
The U.S. Department of Agriculture says 54 percent of the crop is rated good to excellent, which is about average for this time of year.
Burnett said a recent cold snap may have damaged some seedlings but he doubts it will result in extensive winterkill.
He is more concerned about the soft red than the hard red winter wheat crop in the U.S. Planting is extremely delayed due to the late corn and soybean harvest.
While the fate of the 2019-20 winter wheat crop remains to be seen, marketing of this year’s Canadian spring wheat crop is well underway.
Export demand has been healthy and will likely remain strong throughout the year due to Australia’s disastrous wheat crop.
Prices are not as high as last year but are still “reasonable,” said Burnett.
Next year’s acreage will depend a lot on whether durum exports maintain their torrid pace. Canada shipped out 1.32 million tonnes of bulk durum through week 14 of 2019-20, a 57 percent increase over the previous year.
Burnett suspects growers will plant more durum and less spring wheat if durum movement stays strong.