Russia may see 'another bumper wheat crop' in 2018, says SovEcon

Russia, whose wheat production this year looks like setting a record by a distance, could be on for another "bumper" harvest in 2018, thanks to a strong pace of early sowings, SovEcon said.
Russian farmers, after a slower start to the winter crop planting window than a year ago, are now "sowing even faster", said Andrey Sizov Jr, the SovEcon managing director told
According to official data, 11.2m hectares had been sown with winter crops as of Tuesday, up from 10.8m hectares a year before.
The performance means that winter crop sowings look likely to well exceed the official target of 17.5m hectares, as they did last year.
Indeed, "planting area can reach" the record high of 18.1m hectares set for the sowings ahead of this year's harvest "or even exceed it", SovEcon said, putting Russia in line for another strong crop next year.
'Another bumper crop'
"Unfortunately for grain farmers all over the world, it looks like Russia might expand its winter crop acreage," Mr Sizov said, with the strong output being viewed as weighing on global grain prices.
"If we have average winter weather, we might expect another bumper crop next year."
With wheat expected to account for 85-87% of winter crop sowings – which in turn account for more than 60% of overall Russian wheat output – the stage looks set for another strong harvest, assuming the absence of weather setbacks, such as a severe winter.
Already, this year's harvest – pegged by SovEcon at 81.1m tonnes - is expected to drive Russia to top rank among world wheat exporters for the first time, with shipments forecast by most commentators at well in excess of 30m tonnes for 2017-18.
Still profitable
The strength of Russian sowings is being encouraged by relatively weak costs of production, which means that they are running profitably even at current price levels.
Societe Generale earlier this month pegged the cost of production for Russian wheat farmers at about "$100 a tonne, or $2.72 a bushel, thanks to sharp rouble depreciation and lower-cost labour, fertilisers and land rentals".
Mr Sizov said that production costs were, in many regions, even lower, at some $80-90 a tonne, in parts of southern Russia, a major origin for the country's wheat exports.
SocGen added that the cost of production in Russia "is substantially lower than in the rest of the world", forecasting that, against these economics, US farmers will reduce winter wheat (Chicago and Kansas) sowings by 5.1% for the 2018 harvest "to a multi-decade low of 31.8m acres".

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