What will be the wheat harvest in Russia and Ukraine?

Russia and Ukraine began harvesting wheat after rains caused a significant delay, analysts and traders say.

Traders are looking at whether the Black Sea region and European wheat will be able to offset the US supply decline that pushed wheat prices to a two-year high last week. The US Department of Agriculture (USDA) raised its estimate for US production on Wednesday, easing concerns.

Russia and Ukraine are expected to harvest a bumper crop this year, albeit smaller than their record in 2016. As of July 12, Russia harvested 6.4 million tons of wheat from 1.4 million hectares with an average yield of 4.53 tons per hectare, according to data from the Ministry of Agriculture. This is below 9.8 million tons harvested from 2.4 million hectares, with an average yield of 4.01 tons per hectare, by the same date last year.

Sovekon on Wednesday raised its forecast for wheat in Russia in 2017 to 72.9 million tons against 73.3 million tons in 2016. Also on Wednesday, the USDA raised its forecast for wheat crop growth in Russia by 3 million tons to 72 million tons "as improving conditions today are similar to last year, when Russia reached record profitability."

According to the USDA, the wheat harvest in Ukraine has been reduced by 1 million tons to 24 million tons. As of July 11, Ukrainian farmers harvested 1.4 million tons of wheat from 7 percent of the planned area, up from 3.7 million tons on the same day a year ago, the Agriculture Ministry said.

The average wheat harvest is still 3.32 tons per hectare, up from 3.72 tons a year ago. “Cleaning is very slow because of the rains,” said a Ukrainian trader. Domestic wheat prices are rising, he said, as traders vie for supplies to fulfill contracts.

Another trader said the quality of wheat in Ukraine is low at the start of the harvest, but the rains are expected to stop, improving the protein content of the wheat. “It is already clear that there will be no record wheat harvest, but there is no disaster either,” he said, adding that he expects a wheat harvest in Ukraine of up to 24.5 million tons.