Russia. Grain and Feed Update – Attaché Report Dec. 1, 2014
Based on the officially reported data on the progress of the Russian grain harvest, FAS/Moscow increased its forecast of Russia's total grain crop in MY 2014/15 by 1 million metric tons (MMT) to 102 MMT. The forecasted crop includes 58 MMT of wheat, 19.5 MMT of barley, 11.5 MMT of corn, and almost 13 MMT of other grains and pulses. Given these crop volumes and the volatility of ruble exchange rate Russia may export up to 30 MMT of grain, including 22 MMT of wheat, 4.3 MMT of barley, 2.5 MMT of corn, and from 0.5 to 0.8 MMT of other grains and pulses. By mid-November area sown to winter crops, primarily grains, exceeded 16.8 million hectares, and was almost 2 million hectares more than a year ago. However, very dry and cold fall weather in the Central European Russia District may affect the condition of the winter grain crop in 2015.
NOTE: USDA unofficial data excludes Crimean production and exports. However, as of June 2014, Russian official statistics (ROSSTAT) began incorporating Crimean production and trade data into their official estimates. Where possible, data reported by FAS Moscow is exclusive of information attributable to Crimea.
FAS/Moscow increased the previous (October 2014) Russia total grain crop forecast for MY 2014/15 by 1 million metric tons (MMT) to 102 MMT. This crop will be the second highest crop in the last 20 years. This forecast includes 58 MMT of wheat (a 0.5 MMT increase from the previous forecast), 19.5 MMT of barley (a 0.5 MMT increase from the previous FAS/Moscow forecast), 11.5 MMT of corn, and almost 13 MMT of other grains and pulses. Cold but dry weather in the end of October, and in November, allowed farmers in European Russia to harvest the maximum possible corn, and the corn crop, despite lower than yields seen last year, will remain the second highest in the Russian history.
According to the Ministry of Agriculture, reports that include Crimea, as of November 20, 2014, Russian farmers harvested 110.0 MMT of grain from 43.8 million hectares, or 97.2 percent of the sown area. Harvested wheat crop was 62.2 MMT. Without Crimea, Russia's harvested grain crop as of November 20, 2014, was 108.8 MMT, including 61.6 MMT of wheat.
According to the Russian Ministry of Agriculture, as of November 20, 2014 grains and pulses harvested in each of the major federal districts (FD) is as follows:
- Farmers in the Southern FD harvested 27.5 MMT of grain from 7.7 million hectares (98.6 percent of all area planned for harvest). The harvest of all grains, except corn, was completed. 4.1 MMT of corn was harvested from 934,000 hectares, or 95.8 percent of planned harvest area;
- Farmers in the North Caucasus FD harvested 11.0 MMT from 2.9 million hectares (98.0 percent of area planned for harvest). Almost 2.2 MMT of corn was harvested from 0.4 million hectares, or 86.7 percent of area planned for harvest. Harvest of all other grains was completed;
- In the Central FD farmers harvested 27.1 MMT from 7.4 million hectares, or 98.8 percent of area planned for harvest. Corn (3.9 MMT) was harvested from 97.3 percent of planned area, and harvesting of all other grains was completed;
- In the Volga Valley FD farmers harvested 22.3 MMT of grain from 12.2 million hectares, or 99.4 percent of area planned for harvest. Harvest of all crops was completed by the third decade of November. Only some corn remained non-harvested although area sown to corn was very low;
- Farmers in the Ural FD harvested 5.0 MMT of grain from 3.0 million hectares, or 88.0 percent of area planned for harvest. Farmers there do not grow corn, and the non-harvested is wheat area. Given harsh climate in this area, the remaining wheat will not be harvested;
- Farmers in the Siberia FD harvested 14.2 MMT of grain from 9.4 million hectares, or 95.2 percent of area planned for harvest. The remaining non-harvested area was primarily wheat area, and is unlikely to be harvested.
Winter grain sowing
According to the Ministry of Agriculture, as of November 20, 2014, Russian farmers planted 16.84 million hectares with winter grain and rapeseed. By that date, the area sown to winter grains and rapeseed exceeded the plan by two percent, and was almost 2 million hectares, or 13 percent, bigger than on the same date in 2013. The biggest increase in winter sown area was in the Central FD, where the area sown to winter crops increased by 1.15 million hectares to 4.15 million hectares.
It is still very early to make any estimates on the survival of winter grain, or any forecast of the winter crop in 2015. However, industry analysts note that the following factors may negatively influence the survival of the winter crops, especially in the Central FD, and affect Russia's winter grain crop in 2015:
- Low level of soil moisture in the Central and the Volga Valley FDs in October hampered the beginning of plant vegetation;
- Low temperatures and frosts without snow in the Central and the Volga Valley FDs in November halted the plant vegetation.
These factors may result in the weakening of plants and the survival of winter grain may be worse than last year and even worse than the 5 year average.
FAS/Moscow increased the total grain exports forecast in MY 2014/15 to 29.5 MMT (1.5 MMT more than in the previous forecast), including 22 MMT of wheat (1 MMT more than in the previous forecast), 4.3 MMT of barley (0.3 MMT more than in the previous forecast), 2.5 MMT of corn (the same as in the previous forecast), and from 0.6 to 0.8 MMT of other grains and pulses. The increased export forecast is based on the current speed of exports. According to preliminary State Customs data, in the first 4 months of MY 2014/15 (July – October 2014) Russia exported over 14.7 MMT of grain and grain products. This same period also saw the highest ever Russian grain exports. Exports included 12.14 MMT of wheat, 1.83 MMT of barley, 0.56 MMT of corn and approximately 0.12 MMT of other grains and pulses. Export forecasts are based on the current price situation in the world markets and the current exchange rate of the ruble to the U.S. Dollar. Fast depreciation of Russian ruble in November 2014 stimulated grain exports despite increasing domestic prices. Given the high volatility of this exchange rate in MY 2014/15, stimuli to export and price competitiveness of Russian grain, particularly for wheat, may change significantly in the coming months.
Domestic market prices continued to rise driven by stable and growing export and domestic demand, and farmers stopped selling grain to the intervention fund. No wheat was sold at the sessions that were held in mid-November. In the course of the 14 sessions that were held from September 30th through November 19th, farmers sold to the intervention fund: 14,580 MT of milling wheat Class 3 (the last sale was on October 29); 36,045 MT of milling wheat Class 4 (the last sale was also on October 29); 26,055 MT of feed quality wheat Class5, 66,285 MT of food quality rye; and 112,840 MT of fodder barley. Sales of rye and barley continued in small quantities through November 19, 2014.
Depreciation of the ruble continued through November. This factor more than anything else, was the driving force of exports. These exports continued to grow despite an increasing domestic grain prices in rubles