Miller Magazine Issue: 138 June 2021

64 COVER STORY MILLER / june 2021 USDA’s 2021/22 copy-paste of previous highs for Russia-Ukraine-Kazakhstan Recently market participants were joking about US- DA’s method applied for 2021 crop defining in the highly awaited May issue. Some people said that it seems like American analysts just copy-paste previous highs, as market was buzzing about abundant wheat crops expec- tations in the key Black Sea countries. Thus, for Kazakh wheat crop 2021 USDA put 14 MMT (at a quite high level of the previous year); for Ukraine forecast is +3.6 MMT y/y to 29 MMT (almost same like a record 29.1 MMT in 19/20) and for the biggest Black Sea star – Russia, USDA analysts see wheat production 2021 at 85 MMT (almost same like last year's record of 85.4 MMT). Meanwhile, SovEcon analysts do not agree with the USDA, and cut their forecast of Russian wheat crop forecast 2021 at the end of May by 0.8 MMT from their mid-May report to 80.9 MMT on a “smaller winter wheat area, big winterkill in eastern Black Earth and Volgograd and rapidly deterio- rating weather conditions in spring wheat region thanks to recent dryness. This was partly offset by a marginally higher winter wheat yield on better crop conditions and a bigger spring wheat area thanks to current rapid plant- ing (this also reflects huge replanting in the Center)”. We should note that as of 28 May, Russian AgMin noted, that the spring wheat had been planted over a new record 11.8 MLN HA, which is 92.9% out of plan. Agritel under- lined, that it means, that “Russia has caught up spring crops planting campaign, despite a relatively cold spring and a slow start of operations”. SovEcon also noted “The next few weeks weather is the key. Russian spring wheat regions (Volga, Urals, Siberia) urgently need rain. In many cases, topsoil is absolutely dry. Good rains at last predicted for Siberia, which is #1 Russian spring wheat grower, and parts of the Urals. Spring wheat accounts for around 30% of the total Russian wheat crop”. After April’s lack of rain, May brought more moisture and better prospects of world wheat harvest 2021/22. Apart from the abundant crop, May WASDE report showed that Amer- ican analysts also foresee Russia to preserve its place of #1 world wheat exporter in 2021/22. We should note, that even in case Russian wheat crop 2021 would be closer to 81 MMT as per SovEcon vs. 85 MMT in May USDA report, this decrease should be com- pensated with higher by about 5 MMT y/y beginning stocks. Will Napoleonic export plan come true and what could be the main obstacles for its achievement? Black Sea wheat: Napoleonic plan 2021/22 Christina Serebryakova Agricultural Commodities Broker Head of Analytical Department