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Russia’s Wheat Exports Seen by SovEcon Constrained by Stockpiles

Low stockpiles in Russia, the world’s third-biggest wheat exporter last season, will constrain its ability to export the grain to “far below” the record shipment levels of 2011-12, according to SovEcon.

Big agricultural farms, millers and feedstuffs producers held 15.2 million metric tons of wheat as of Dec. 1, less than the 25.9 million tons of inventories at the same date in the drought year of 2010, the Moscow-based agricultural researcher said today on its website, citing Federal State Statistics Service data. The amount Russia currently holds is similar to stockpiles in mid-May 2010, just before the country’s worst drought in 50 years, SovEcon said.

“We have the lowest stocks since the early 2000s,” Andrei Sizov Jr., the company’s managing director, said by phone in the Russian capital today. “That means there won’t be much of exports later this season and Russia will export small amounts in the new season,” said Sizov, who didn’t give an estimate for next year’s shipments.

Russia exported an all-time high of 21.6 million metric tons last season, according to U.S. Department of Agriculture data.

“Normally, we have such stocks in April or May, closer to a season end, while now, we are just in its middle,” Sizov said. “That means Russia’s exports will fall in the new season because of the small physical amount of grain we will have, and subsequently high domestic prices.”

Russia’s domestic wheat prices may top $400 a ton later this marketing year, exceeding the record levels of April 2007, Sizov said. That will stimulate imports from Kazakhstan, Ukraine, Europe and even South or North America this season, he said. SovEcon estimated imports at 2.5 million tons for 2012-13, and the estimate may be raised in 2013, Sizov said.

Worsening Condition

The prospects for next season’s harvest remain unclear because the condition of winter crops continues to worsen, Sizov said. Plants may be destroyed by frosts in parts of the Volga district and the Rostov region in the south, he said. Temperatures there are approaching levels at which plantings usually die, which is minus 15 degrees Celsius (5 degrees Fahrenheit) at seed level, or 5 centimeters (2 inches) below the surface, Sizov said.

The Agriculture Ministry’s estimate for a winter grains harvest of 38.6 million tons in the next season is “extra optimistic,” Sizov said.

Wheat for March delivery rose 0.5 percent to $8.15 a bushel on the Chicago Board of Trade today, for a 25 percent gain this year.

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