A spring drought in wheat growing regions on the Black Sea has already reduced the outlook for this year's harvest but forecast rains could halt the damage in the coming days and weeks, a crucial period for crop development.
A hot dry April followed an unusual January-February cold snap which hit shoots of winter wheat from Bulgaria to Krasnodar, in southern Russia, resulting in forecasts of substantial declines in national wheat crops throughout the region, and a bigger drop in exports from Russia in particular.
"The crop is poorly," a farmer from Russia's Adygeya region, just north of the Black Sea coast, said on the sidelines of a meeting with traders and analysts in Moscow. "It's certainly worse than last year."
The steepest decline will be in Ukraine, where farmers faced record drought conditions as early as autumn, during the sowing period. The wheat harvest is likely to fall to between 10 and 13 million tonnes in 2012 due to autumn drought, then severe frost in January-February, analysts and weather forecasters said.
"We see the harvest of 10 to 12 million tonnes of wheat in 2012 and this figure will not be revised significantly," Tetyana Adamenko, head of the agricultural department of Ukraine's meteorological service, told Reuters. "We had a drought in eastern and southern Ukraine, but recent rains had improved the condition of crops. But some regions, Kherson and Mykolayiv, saw no significant rains," she said.
French analyst Agritel has said Ukraine's wheat harvest is likely to fall to 13.48 million tonnes in 2012 from 22 million in 2011 after the area under wheat shrank to 4.9 million hectares this year from 6.7 million in 2011. It also said unfavourable weather could reduce the yields of wheat to 2.75 tonne per hectare from 3.28 tonne per hectare last year.
Bulgarian farmers see the 2012 wheat crop down by 20-25 percent this year due to the extensive drought in the autumn and freezing temperatures in the winter, the deputy chairman of the of the National Association of Grain Producers Radoslav Hristov told Reuters.
Of Russia's regions, the southern breadbasket regions on the Black Sea are the hardest hit by spring drought, though the country's wheat harvest is expected to decline by only about 5 percent as a result, given favourable weather in other regions. Russia, in contrast to Ukraine, has increased its overall acreage, though official forecasts are for a crop equal to this year's 94 million tonnes. Analysts from the SovEcon consultancy forecast total Russian wheat output in the 2012/2013 crop year at 53 million tonnes, down from more than 56 million tonnes harvested last year. A US Department of Agriculture annual forecast 54 million.
But the effect on exports is likely to be more dramatic. A lower harvest combined with decline in stocks is likely to result in a 6.5 million tonne drop in Russian wheat exports from this year's record 20.5 million, the consultancy said. An exporter of Russian wheat said the export decline could be even steeper, to as little as 12 million tonnes, and said downgrades to his outlook were possible if rains did not materialise.
"These 10 days will be the most crucial for the formation of the wheat head. There was rain over the weekend, but not everywhere, and not enough," a second exporter said. "Rain is forecast for the coming days in some regions, including Krasnodar. If it does rain, we will not raise our forecasts."
Russia's state forecaster said on Wednesday that rains were expected through Friday in key growing regions such as Krasnodar and other provinces along the Ukrainian border. The region saw scattered showers after similar forecasts for the past weekend. Traders were reserving final judgement on damage while analysts were fanning out in regions such as Krasnodar to observe rainfall levels in the coming days.
"We have been advised to wait on making any decisions," another exporter said, citing inconclusive reports from southern fields. Satellite data from the Russian Academy of Science Institute of Space Studies showed as of early April that the condition of the winter crop in the south was significantly worse than it had been a year earlier, but had improved by mid-May.
Combined with spring crops, the picture is close to average in the south, it said. "On the whole the situation is better than the situation with winter crops, but it is worth noting that this is clearly a reflection of the condition of spring crops," an institute presentation said.