Wheat and barley took a significant share in the structure of grain crops production in Russia, and they play a very special role in forming of the domestic consumption and the export potential of the country. Therefore, formation of the harvest volumes of the reporting grains in terms of the current climatic changes, and estimation of the qualitative indicators of new crop grains, are one of the key issues in the market segment.
Formation of the harvest-2018
Seed material is a starting point for the analysis of the production of early grain crops, because the quality of the future harvest depends on how consciously agrarians make their choices and provide the pre-planting cultivation works. Taking into account the results of the study "Market of seeds in Russia - 2018", APK-Inform experts should note that the majority of agrarians growing early crops, used the seeds of low-quality characteristics for the harvest in the current year. According to agrarians, own-produced seeds formed more than 80% of the used seed material (produced at the territory of the farm).
Also, crop varietal diversity became another most important aspect, which influenced on the quality characteristics of wheat and barley of the harvest-2018, which often depended on the farm sizes. There was fixed the direct dependence of the number of cultivated crop varieties on the arable land areas. So, the farms with the areas under wheat and barley at nearly 500-3000 ha usually used no more than 2 varieties, and large-scale enterprises and agricultural holdings often used more than 4 varieties.
At the same time, in terms of initially low quality of seeds, agrarians approached rather careful seed treatment, and as a result almost 99% of wheat seeds and barley were treated before beginning of the planting campaign. Agrarians mainly used protectants of the fungicidal group (70-73% of the general seed volumes), preferring to use insecticides during the vegetation period.
Planting campaign (winter/spring crops)
In both autumn and spring period, the planting campaign of grains for the harvest-2018 developed in rather difficult weather conditions. Due to heavy rains in most Federal Districts, agrarians failed to begin the planting works of winter wheat and barley in time. However, precipitations in late August and early September allowed accumulating rather sufficient productive moisture in the soil, which contributed to the further development of even sprouts of the reporting grain crops. At the same time, positive temperature figures in some regions until the third ten-day period of December, allowed planting the crops throughout all areas planned by the Ministry of Agriculture.
The spring field works started in somewhat later terms, due to the weather factor. In particular, agrarians of the Volga Federal District informed about formation of flooded areas in the fields, which slowed down the planting campaign rates, but led to partial replanting of the areas under winter crops. In other regions of the country, the situation was also rather difficult, and the planting rates were unstable due to periodic worsening of the weather conditions. For example, in the Siberian District, which is one of the key regions-producers of spring wheat, the planting campaign started with in more than 2-3 weeks compared with the traditional dates, which affected the ripening processes of the grain.
Influence of the weather conditions in the main vegetation period
During the vegetation period, most parts of the country faced sharp changes in the air temperature and precipitation depth.
In the period of growth of the reporting crops, in the Southern and Siberian Federal Districts and some regions of the Volga District there was observed quite insufficient level of precipitations and high air temperatures. In addition, the crop areas were damaged by pests and weeds, therefore agrarians increased the number of pesticide treatments of the herbicide and insecticide groups.
But the Central and Ural Districts faced some increasing of the cases of plant diseases (crop rust, septoria blight, fusarium, etc.), due to heavy rainfalls. Increasing of fungicidal treatments somewhat stabilized the situation.
In the European part of the country, the harvesting campaign of winter grains started in 1-2 weeks earlier than the scheduled dates. At the same time, in the Southern District the harvesting rates were the highest ones, whereas in the Central, Volga and Ural Districts periodic precipitations made agrarians to stop the field works.
Generally, the European regions of Russia almost completed the harvesting campaign of wheat and barley, at the same time in the Siberian and Ural Districts the campaign started developing only.
In most regions, the yield figures of wheat were significantly lower compared with last year in almost all regions of the country, except for the Siberian District.
The similar situation was observed with the yield of barley. Only the Siberian District demonstrated the growth of yield figures among all Federal Districts. As in the case of wheat, the harvesting campaign of barley also significantly delayed: the harvesting rates were 2 times lower compared with 2017.
Generally, APK-Inform analysts estimated the harvest of grains and pulses in the Russian Federation in the season-2018/19 at the level of 113.7 mln tonnes (down 16% compared with 2017/18 MY), including wheat production — 70.9 mln tonnes (down 17%), and barley — 17.5 mln tonnes (down 15%).
Formation of early grain stocks
The earlier start of the harvesting campaign in the south of the country due to dry weather conditions, contributed to a significant increasing of the carry-over stocks. According to the Federal State Statistics Service (Rosstat), as of July 1, 2018, the carry-over stocks of grain crops totaled 20.6 mln tonnes (up 34% compared with the same date last year). The active grain export rates in the beginning of the season and low yield figures contributed to decreasing of the rates of formation of the crop stocks: as of August 1, the carry-over stocks totaled 33.7 mln tonnes, up 6% only compared with the same date last year.
According to the Federal State-Funded Institution "Federal Centre of Quality and Safety Assurance for Grain and Grain products", at the end of August the share of 3-grade wheat reached 19%, against 21.6% last year, 4-grade wheat — 46.2% (46% in 2017), and 5-grade wheat — 30.1% (32.2%).
Sales of early grains
The volume of domestic consumption of wheat was estimated at the previous season level — 39.8 mln tonnes (up 0.3% compared with 2017/18 MY). The reporting low-scale increase developed due to the increased usage of wheat for feed purposes, but the usage of wheat for food purposes did not grow — the production of flour reduced only, supplying of finished products on foreign markets remained relatively low-scale, and did not significantly impact on the level of wheat consumption in Russia. In 2018/19 MY, the domestic consumption of barley can decrease by 2.1% compared with the previous season — to 13.6 mln tonnes. The decline will develop due to the reduced estimations of feed consumption caused by the price ratio in the coarse grain sector. The volumes of food consumption are quite small — nearly 270 thsd tonnes.
In the current season, the exports will become one of the perspective directions for wheat and barley sales. According to the Federal Customs Service, since July 1 to August 30 Russia already exported 9.8 mln tonnes of grains, up 39% compared with the same period in 2017/18 MY. In particular, the supplies of wheat increased in 1.6 times — to 8.2 mln tonnes, but the supplies of barley decreased compared with July-August last season — to 1.2 mln tonnes, down 13%.
Egypt and Turkey remained the main destinations of the supply for wheat. Saudi Arabia and Iran were the prospective sales markets for barley.
In the season-2018/19, the export potential of wheat totals 40 mln tonnes, which is comparable with the level of 2017/18 MY, while the supplies of barley can reach 5.2 mln tonnes, down 9% compared with last season.
Julia Krehovich, grain market analyst at APK-Inform Agency