Friday, 23 June 2017

Friday's Black Sea agri-business news

Steppe Agro Holding, a company belonging to AFK Sistema, is considering building dairy farms in Moscow, Rostov and Stavropol regions, Chairman of the holding’s Board of Directors, told reporters on Wednesday.

The Russian agricultural watchdog, Rosselkhoznadzor, continues to impose restrictions on Belarusian dairy imports which is possibly related to the previous news story. The decision is officially attributed to sanitary requirements, while Minsk accuses Moscow of pursuing political purposes.

It looks like Russia will not cancel the embargo on tomato imports from Turkey any time soon, "We may authorise [import of tomatoes from Turkey] at some time but definitely not in years ahead," the Russian Minister of Agriculture is reported as saying earlier this week.

The Kazakhstan Ministry of Agriculture is forecasting a 17-18mmt grain crop this harvest, down on last year’s 20.6mmt crop, and plan to export 8-8.5mmt in the new 2017/18 marketing year.  They don’t give a yield forecast for wheat but last year they produced 16.5mmt of wheat so it’s likely to be pro-rata, although the current ag policy is to reduce reliance on wheat.

(If we can raise funds we will go to Kazakhstan to have a look at how the harvest is progressing and feedback to our crop tour subscribers, drop me a line if you would like to contribute.)

Harvest officially started in Ukraine yesterday, with the first 2,500mt of winter barley cut in Kherson and Odesa oblasts with an average yield of 3.14mt/ha.

Ukraine exported 43.0mmt of grain during the current marketing year, to June 21 2017, including 17.3mmt of wheat, 5.3mmt of barley, and 20.1mmt of corn.

Yesterday, Ukraine opened a new 100,000mt elevator complex on the Black Sea port of Mykoliaiv with the capacity to handle 400,000mt per year, assuming they have the train waggons to get it there.

In 1942 Ukraine had 12,000-grain waggons, today they have 3,000 and haven't bought a new one since 1986.

Thursday, 22 June 2017

Unfavourable weather reduced Ukraine wheat prospects...possibly

Ukraine’s unfavourable weather and reduced yield prospects for winter wheat continue to be reported widely based on satellite-derived vegetation indices (the normalised difference vegetation index, or NDVI).

Dryness issues based on NDVI images are in the north east of the country while the southern regions, which are normally dry this time of year are looking good, so it should balance itself out.

I haven’t seen one report on drought-stricken wheat in Ukraine that has been accompanied by a photograph suggesting the reports are based solely on remote satellite images, so here is a photograph of wheat taken in north east Ukraine three weeks ago (we will be back there taking more pictures soon).

It’s also worth noting that the USDA wheat forecast based on NDVI readings published this time last year was 24.5mmt, 10% light on the eventual 27mmt crop.

I think Ukraine wheat should, by and large, be OK, the real problem will be felt by corn which will struggle if dryness persists as the shallow, underdeveloped roots struggle to reach moisture.

Wednesday, 21 June 2017

It's hot and dry in the summer in Ukraine

Coming back to Crop Tour HQ two weeks ago and it's been flat out busy, busy, busy.

The Black Sea Crop Tour reports are now written and available to purchase for a modest £350 for the two.

They include the only independent crop yield forecasts for Russia and Ukraine and you also get the rest of the season's crop tours thrown in for that.

Drop me a line if you want to secure copies, I'll email them out by return and follow up with an invoice when I get a minute - if you're currently waiting for an invoice, don't worry, it will be coming just once I get through this mountain of work.

Latest crop reports are indicating it's hot and dry in parts of Ukraine which considering it's the middle of summer really isn't that big a news story.

Some analysts are calling a lower Ukraine barley crop citing hot dry weather which is incorrect; the lower barley crop is down to fewer hectares and late spring cold damage, something we reported on following our tours in March and May.

(I've said it before and I'll say it again, you can't beat getting out and about across the cropping regions to understand what's really going on out there, there's only so much you can tell about a crop from Google.)

As of June 15, Russian spring sowing stood at 51.1 million hectares or 97% of the forecast including 13.1mha of spring wheat, 7.5mha of spring barley, around 3.0mha of corn, 7.5mha of sunflowers and 2.4mha of soybean, all of which are slightly different to predictions of three weeks ago so I will be tweaking crop yield forecasts accordingly.

I’d update the figures for Ukraine but the Ministry website is next to useless today and I really don't have time to sit watching a web page not load for five minutes, actually, it's been pants for some time now, but I'll get around to updating Ukraine soon.

Back to the grindstone, laters.

Latest USDA weather update for western FSU

Excellent growing conditions in Russia contrasted with intensifying drought in north-central Ukraine.

Over western and southern Russia’s primary growing areas, another week with widespread moderate to heavy showers (5-50 mm, locally more) maintained adequate to abundant soil moisture for reproductive (north) to filling (south) winter wheat as well as vegetative small grains, corn, and sunflowers.

However, producers would likely welcome drier weather over the upcoming weeks for crop maturation and drydown in key southern wheat areas.

In Ukraine, showers and thunderstorms (5-30 mm) were reported in all but drought-afflicted north-central growing areas.

As a result, crop areas bordering Russia, Belarus, and the immediate Black Sea Coast were experiencing good growing conditions for vegetative corn and soybeans (north and west) as well as sunflowers (east).

However, dryness and drought continued to adversely impact filling winter wheat and vegetative summer crops from west-central Ukraine into primary corn and soybean areas in north-central portions of the country (centred on the Poltava Oblast).

Latest satellite-derived vegetation health data depicted a sharp gradient between severe crop stress in north central Ukraine and good to excellent vegetation health from the Black Sea Coast into eastern Ukraine.

Latest USDA weather update for eastern FSU

Dry, warm weather over much of the region was beneficial for spring grain (north) and cotton (south) emergence and establishment.

After several weeks of wet weather, sunny skies over northern Kazakhstan and neighboring portions of central Russia promoted spring wheat and barley development.

However, showers (10-25 mm) approached from the west, maintaining excellent moisture supplies in the Urals and Volga Districts.

Likewise, showers and thunderstorms (10-50 mm) in southern portions of the Siberia District alleviated short-term dryness and boosted prospects for spring grain establishment.

Meanwhile, seasonably dry, hot weather (35-40°C) in Uzbekistan and southern Kazakhstan promoted the development of irrigated cotton and facilitated winter wheat harvesting.

Latest USDA weather update for Europe

Sunny skies and near- to above-normal temperatures were beneficial for maturing winter crops, while excessive heat and dryness on the Iberian Peninsula caused rapidly-increasing stress to summer crops.

From France and England southeastward into the northern Balkans, dry weather coupled with temperatures in the upper 20s to lower 30s (degrees C) promoted winter crop maturation, drydown, and harvesting.

In contrast, light to moderate showers (5-25 mm) in northeastern Europe benefited reproductive to filling winter wheat and rapeseed.

On the Iberian Peninsula, excessive heat (41-44°C) stressed vegetative summer crops and hastened corn and sunflowers toward or into reproduction up to three weeks ahead of normal.

Furthermore, the heat and dryness exacerbated wildfires and made containment efforts difficult, particularly in central and northern Portugal.

Farther east, dryness and heat (32-35°C) across much of northern Italy’s Po River Valley increased irrigation requirements for vegetative corn, soybeans, and sunflowers, although localised showers and thunderstorms (10-50 mm) provided relief in central portions of the valley.

In Greece, moderate to heavy rain (10- 60 mm) provided supplemental moisture for irrigated summer crops but caused localised winter crop harvest delays.

Wednesday, 7 June 2017

Latest USDA weather update for western FSU

Beneficial showers in Russia contrasted with a return to dry weather in Ukraine.

In southern and eastern Ukraine’s winter wheat areas, mostly dry, warm weather (up to 2°C above normal) accelerated winter wheat through the flowering stage of development.

Wheat conditions in Ukraine are highly variable, with satellite-derived vegetation health data indicating excellent conditions in southern and eastern portions of the country contrasting with locally poor vegetation health in central Ukraine due to spring dryness and drought.

Across north-central and western Ukraine, light to locally moderate showers (2-14 mm) maintained topsoil moisture for corn and soybean emergence and establishment, though here, too, localized drought lingered.

In Russia, widespread showers and thunderstorms (2-30 mm, locally more) sustained excellent yield prospects for flowering to filling winter wheat from the southern Central District into the Southern and North Caucasus Districts.

Farther north, moderate to heavy rain (10-70 mm, locally more) boosted moisture reserves for vegetative small grains and summer crops from eastern Belarus into Russia’s Volga District.

Latest USDA weather update for eastern FSU

Wet weather in the north contrasted with sunny, warm conditions in southern portions of the region.

A cold front triggered showers and thunderstorms (5-50 mm) across spring wheat areas of northern Kazakhstan and central Russia, boosting soil moisture supplies for emergence and establishment.

Meanwhile, mostly dry, hot weather (35-38°C) in Uzbekistan promoted late cotton planting but maintained higher-than-normal irrigation demands for crop establishment.

Latest USDA weather update for Europe

Warm weather and widespread showers promoted crop development, though locally dry conditions lingered in southern Europe.

A warm, southerly flow developed over the continent as a broad area of high pressure shifted south and began to weaken.

Temperatures averaged 2 to 5°C above normal across most major growing areas (locally up to 8°C above normal in central Europe), with daytime highs topping 30°C from Spain and France into the Balkans.

Temperatures were not high enough (peak values were at or below 32°C) to stress reproductive to filling winter grains and oilseeds in northern Europe, while corn in southern Europe had not yet reached the temperature-sensitive tasselling stage of development.

A series of weak disturbances generated widespread showers and thunderstorms over the continent, but parts of southern Europe were dry.

In particular, locally heavy rainfall (25-70 mm) in southwestern France boosted moisture reserves for vegetative corn and sunflowers, while lighter showers (2-20 mm) in England, northern France, Germany, and western Poland were beneficial for vegetative small grains and summer crops.

Likewise, light to moderate showers (2-30 mm) were favourable for early corn and cotton development in Greece and the lower Balkans, while dry weather in the central Danube River Valley promoted winter crop maturation and early summer crop development following a wet spring.

Nevertheless, pockets of dryness maintained some concerns for corn, soybeans, and sunflowers over western and northern Italy into central and southeastern Spain.

Tuesday, 6 June 2017

Second Black Sea Crop Tour successfully completed

Back at base after successfully and safely completing the second Black Sea Crop Tour of the season.

Last week we drove 2,400km through Russia and Ukraine assessing the condition and likely harvest prospects for the main commodity crops.

We also met farmers, traders and analysts and discussed how the season was progressing and their insight on how harvest 2017 was looking.

During the tour, I posted 100 pictures and 5 videos on our members-only Twitter account so subscribers could follow what we were seeing.

I am now back in the office processing numbers and writing reports which will be sent out to subscribers this week and will contain crop condition assessments, yield forecasts and comments.

Drop me a line if you would like to sign up to receive the results from this tour and from the tours scheduled for the rest of the season, membership costs only £350 for the season.