Russian Winterkill Much Higher Than Normal

The hard winter seems to have taken it's toll on Russian grains with the Ministry now reporting that 13.6% of the crop has been lost.

"In a typical year, between 5 and 10 percent of the area planted to winter crops are destroyed by winterkill," according to the USDA. However, losses have "been relatively low for the past three years -- substantially less than 10 percent," they say.

There also remain quite a few question marks over yield potential this season for wheat that has survived the winter.

"Fall crop establishment holds the key to wheat potential, especially in the northern climates where dormancy comes on early, and winters are too cold for wheat to grow. Insufficient growth in the fall leads to smaller roots and a reduced yield. By contrast, a well established crop in the fall has a head-start on spring growth. This promotes a higher yield," explains Gail Martell from Martell Crop Projections.

"Russia wheat potential is reduced by fall dryness in key growing areas. By the time drought-relieving rains arrived in mid November, it was too late for wheat to grow. Ideally, wheat should be tillering before dormancy sets in, but with dry conditions fall growth was stifled," she adds.

"No doubt, wheat was lost in the Volga District, where January snow cover was scanty, less than 5 centimeters deep, when very cold temperatures were observed. To obtain maximum hardiness, wheat needs time to adapt in the fall to steadily cooling temperatures and shortening daylight hours, a process called vernalization. Wheat hardiness may have been compromised last fall due to inadequate development time with drought," Gail concludes.

"Winter grains comprise between 25 and 35 percent of total grain area in Russia, and 40 to 50 percent of production. Wheat is the major winter grain and accounts for about 80 percent of total winter grain area," according to the USDA.

The USDA pegged Russian wheat output at 58 MMT earlier this month - down 6% from 61.7 MMT in 2009. It's starting to look like that might be too optimistic and 53-55 MMT may be nearer the mark, a reduction of around 11-14%.

With Russian carryover wheat stocks at the end of this season estimated at 12.8 MMT by the USDA it's hardly a crisis, more of a step in the right direction. They currently have 2010/11 Russian carryout at 8.3 MMT, knock off another 3-5 MMT for lower 2010 production and we have ending stocks for next season at a less burdensome level of around 4 MMT.