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IKAR in Mass Media

Has the cold winter disturbed Black Sea wheat? -Braun

10 февраля 2017 года

CHICAGO, Feb 8 (Reuters) - This winter has been one of the colder ones in recent memory for Eastern Europe, and the condition of the winter wheat – its signature crop – has come into question recently as yet another frigid spell has struck the region.

The importance of the Black Sea region in global grain trade continues to rise and it is currently the world’s leading wheat supplier. In 2015/16, Russia and Ukraine together constituted 25 percent of global wheat trade – and this share is set to climb in 2016/17.

Eastern Europe can have some of the coldest winters in the Northern Hemisphere, putting winter-sown crops at risk if temperatures drop low enough. Winter wheat is generally resilient to adverse weather, but the plant comes under risk of serious damage or death at minus 10 degrees F (minus 23 degrees C), particularly without an insulating layer of snow.

According to the MARS crop forecasting unit of the European Commission, the colder end to 2016 pushed winter grains into a much more advanced stage of hardening across Eastern Europe than the year prior.

The hardiness is a measure of how well the plant is prepared to sustain winter temperatures, so the extra layer of defense against the cold means that the 2017/18 wheat crop – in the ground right now – should be able to sustain lower temperatures with lesser risk.

In many parts of Ukraine and winter-wheat producing Russia, temperatures will fall below 0 degrees F (minus 18 degrees C) overnight on Wednesday, some even approaching the critical threshold. Most of these areas have a thick layer of snow, but in some of the southern regions the coverage is a little more suspect (http://reut.rs/2k3HcTB).

However, Ukraine and the southern and central districts of Russia – where the bulk of the country’s winter wheat is grown – have sustained several cold snaps this winter, which can be taxing on the crops regardless of the snow cover.

It has been a while since winter grains in the Black Sea have had to endure such persistently cold weather, and some analysts are beginning to factor this in to forecasts for the 2017/18 harvest.

But wheat pessimism has not been too fruitful in Russia or Ukraine in recent times, even when the outlook is questionable.

CURRENT CONDITIONS

It is not easy to obtain clear, consistent, timely updates on crops in the Black Sea region, which is why it is often hard to know exactly what state the wheat is in.

Amid the deep freezing event that occurred roughly 10 days ago, Russia’s agriculture ministry said it had no concerns over the condition of winter grains as a result.

Somewhat to the contrary, Russian agricultural consultancy IKAR expects that the colder winter will reduce the Russian wheat crop by a sizable 6 million tonnes from last year’s record 73 million tonnes.

On Russia’s side is the fact that it had a very successful sowing campaign last autumn, as the winter grains area rose to the highest levels in at least seven years, stemming partially from good sowing conditions. Additionally, Russian-based analysts had a very good outlook for the wheat crop heading into the winter.

But the same cannot necessarily be said for Ukraine. Even though farmers had increased winter wheat area by 5 percent from the year prior, analysts had been concerned about the condition of the crop heading into the winter based on delayed planting under too-dry and then too-wet conditions, along with the cold end to the autumn.

However, as of Dec. 29, an estimated 83 percent of winter grains in Ukraine were in satisfactory or good condition, according to analyst group UkrAgroConsult.

A more recent assessment of the crop is not readily available, but the Feb. 1 crop conditions in 2016 and 2015 were 67 and 82 percent satisfactory or good, respectively, implying that the current crop probably did not suffer any unusual stress based on adverse autumn weather.

It is worth mentioning that the 2015/16 Ukrainian winter wheat campaign raised red flags right from the start that perpetuated well into the spring. Planting in the fall of 2015 occurred under extremely dry conditions and weather did not improve much heading into winter, resulting in the low crop ratings.

Early in 2016, some analysts were calling for a Ukraine wheat harvest as low as 18 million tonnes, well below recent averages. Even by mid-May under favorable weather conditions, many groups were still in the low 20 million-tonne range.

Ukraine ended up harvesting 26 million tonnes of wheat in 2016 - which many did not see coming - although the looming potential for a larger crop should have been apparent judging by the general trend of Ukrainian analyst estimates. Ukrainian analysts have been consistently too pessimistic on the domestic wheat crop in past years, and this should not be forgotten this time around.

As of early January, UkrAgroConsult pegged the 2017/18 Ukraine wheat crop at 23.5 million tonnes, which implies a more conservative yield estimate given an assumed increase in planted area.

Both Russian and Ukrainian winter wheat yields have made astounding strides in recent years based on the improvement of seed and farm technology as well as management practices, meaning that the same set of weather conditions that may have harmed crops 10 years ago may not have the exact effect today.

The lesson here may be that when in doubt, underestimating Ukrainian and Russian wheat potential does typically bode well, and all other things being equal, wheat exports out of the region will not be backing down any time soon.

So unless it does not rain in the springtime at all or crops emerge from dormancy just to be hit with a freak late-season freeze, the Black Sea might not be the place to go looking for wheat troubles this year.

Source: Reuters  |  #grain   |  Comments: 0   Views: 84

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