Union: USDA estimate of Russia’s wheat harvest incorrect

MOSCOW, Aug 13 (PRIME) -- The decision of the U.S. Department of Agriculture (USDA) to slash its forecasts for harvest and exports of Russia’s wheat is based on obsolete data and is incorrect, but may lead to a wheat price growth, Eduard Zernin, chairman of the Russian Union of Grain Exporters, told PRIME.

On Thursday, the USDA reduced its forecast for Russia’s wheat harvest in 2021 to 72.5 million tonnes from 85 million tonnes and the forecast for exports in the 2021–2022 agricultural year, which started on July 1, 2021 and will end on June 30, 2022, to 35 million tonnes from 40 million tonnes.

“USDA’s adjustment is a result of hysterics instead of understanding the real situation and analysis of the current Russian crop statistics,” Zernin said.

The adjustment was “very strange” as it followed a decision of the Russian Agriculture Ministry to maintain the 2021 grain harvest forecast at 127.4 million tonnes, the wheat harvest forecast at 81 million tonnes, and the estimate for the combined grain export potential at 51 million tonnes.

“The USDA suddenly turned into a market follower that trails behind the opinions of others instead of a market-maker. And it trails behind an incorrect opinion based on incorrect data of the Federal State Statistics Service published on June 1 and does not take into account re-sowing of almost 1 million hectares, which equals to more than 3 million tonnes of grain,” he said.

Harvesting is going well and local climate problems will have no impact on the result, he said.

But the market cannot ignore the opinion of such a trusted source like the USDA, so the FOB price for wheat should rise to U.S. $300 on Friday. It will disappoint the local Russian market, as Russia’s neighbors in the Black Sea basin will be the main beneficiaries, he added.

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