MOSCOW/KIEV, July 13 (Reuters) – Russia and Ukraine have started harvesting wheat after rains caused a significant delay.
Yields are strong in Russia and lower in Ukraine, analysts and traders said.
Traders are looking to see if Black Sea and European wheat can compensate for reduced U.S. supply, which sent wheat prices to a two-year high last week.
The U.S. Department of Agriculture’s estimate for U.S. wheat production July 12 was higher than what the trade expected, easing fears.
Russia and Ukraine are widely expected to harvest a large crop this year, though smaller than their record crops in 2016.
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SovEcon on July 12 upgraded its forecast for Russia’s 2017 wheat crop to 72.9 million tonnes compared with 73.3 million tonnes in 2016.
The USDA raised its forecast for Russia’s wheat crop by 3 million tonnes to 72 million tonnes “as growing conditions to date are similar to last year when Russia achieved record yields”.
The USDA’s estimate for Ukraine’s wheat crop was downgraded by one million tonnes to 24 million tonnes.
A trader said the quality of Ukraine’s wheat is not high at the start of the harvest but that rains were expected to stop, improving the protein content in wheat.
“It is already clear that there will be no record wheat crop, but there is also no catastrophe,” he said, adding that he expects a Ukrainian wheat crop of up to 24.5 million tonnes.
As of July 12, Russia had harvested 6.4 million tonnes of wheat from 3.46 million acres with an average yield of 67.3 bu. per acre, Agriculture Ministry data showed.
That was down from 9.8 million tonnes harvested from 5.93 million acres at an average yield of 59.62 bu. per acre by the same date last year.
Harvesting started in Russia’s southern exporting bread basket regions where yields in the Krasnodar and Rostov regions are higher than a year ago but down in the Stavropol region.
“The pace of harvesting is low compared with recent years but there is essentially no delay,” agriculture consultancy SovEcon said.
It expects dry weather to come to Russia’s southern regions and bring the harvest closer to the timeframe of recent years.
The state weather forecaster expects weather to improve in the Volga region, which is also starting its harvest this week.
As of July 11, Ukrainian farmers had harvested 1.4 million tonnes of wheat from 7 percent of the planned area, down from 3.7 million tonnes on the same date a year ago, the Agriculture Ministry said.
The average wheat yield so far is 49.36 bu. per acre, down from 55.3 bu. a year ago.
“The harvesting is very slow due to rains,” a Ukrainian trader said. He said domestic wheat prices are rising as traders are struggling for supply to fulfill contracts.
