|Russian Production Cuts |
Global markets have found support today as crop production estimates for Russian wheat were marginally reduced, while weather forecasts for the US northern planes and Canada continue to cause concern for already drought-impacted regions.
Due to disappointing initial harvest yields in Russia, Sovecon have reduced their estimate for Russian wheat production to 82.3Mt, down from the previous 84.6Mt estimate.
According to the Russian Ministry of Agriculture, by the 13th of July, the wheat harvest had reached 2.5Mha, producing 8.1Mt of grain so far with an average yield so far of 3.24t/Ha. Average winter wheat yields will need to improve as harvest progresses to meet market expectations.
In the US and Canada, weather forecasts are causing concern again for northern US states and Canada as rainfall is lacking from the 7-day outlook.
What does this mean?
Without the large buffer of stocks, the 2021/22 season can not afford poor yields and small grain crops, markets will react quickly to shortfalls in production.