Analysts again lowered their estimates of Russia’s 2024 wheat production early this week but based on this week’s price action, the wheat market now appears to have factored in Russian crop problems, although dry weather in southern Russia could still reduce yields there. Moscow-based analysts now see production falling more than 10 million metric tons (MMT) short of earlier expectations and resulting in a significant drop in Russian exports versus this year’s record high, but the country’s exports should still be large from a historical perspective.
SovEcon has lowered its crop estimate to 82.1 million metric tons from a previous estimate of 85.7 MMT and IKAR cut its crop forecast to 81.5 MMT from a previous estimate of 83.5 MMT made last week. IKAR lowered its forecast for Russia’s 2024/25 exports to 44 MMT from 45-47 MMT previously. Russia is expected to export 53.5-54.0 MMT in its 2023/24 marketing year, which ends June 30.
At 81.5-82.1 MMT, Russia’s wheat production would be the lowest since 2021, when production fell to just 75.16 MMT, which, along with Russia’s invasion of Ukraine, helped send wheat prices soaring. Russia’s 2021/22 wheat exports fell to a five-year low of 33.0 MMT, with post-Covid pandemic food security concerns also likely contributing to the drop-off. USDA will likely lower its estimate of Russian production and exports at least moderately in its June 12 Supply/Demand report.
