Market News & Headlines >> Pessimism over Ukraine's Wheat Crop

Ukraine’s grain industry is pessimistic about the country’s 2016 wheat production and export prospects with winter wheat seedings down and the crop in poor condition due to an ongoing drought.

Data from Ukraine’s Agriculture Ministry indicates that about 11% of intended winter wheat area was left unsown amid excessive dryness across large portions of the country.

Kiev-based analyst UkrAgroConsult on Monday cut its forecast for Ukraine’s 2016-17 wheat production by 1.5 million metric tons to 17.5 million due to the poor condition of the crop. That compares with 2015-16 production estimated by USDA at 27.0 million tons and by the U.S. agricultural attach in Kiev at 27.6 million tons.

"Only 62 percent of sown winter grain have sprouted so far and around 30 percent of them are in poor state. This has forced us to revise the outlook," UkrAgroConsult analyst Yelizaveta Malyshko told Reuters News Service.

Ukrainian wheat crop conditions are said to be the worst since the fall of 2011. Ukraine harvested a wheat crop of only 15.8 million tons in 2012, according to USDA, exporting 7.2 million tons in 2012-13. What's more, winter wheat seedings will be lower than in the fall of 2011.

A source in Ukraine’s Agriculture Ministry told Reuters that grain traders estimate Ukraine’s 2016-17 wheat exports could fall to as low as 3.5 million tons versus 2015-16 exports of 16.5 million tons. USDA currently estimated Ukraine’s 2015-16 exports at 15 million tons. There are reportedly trade estimates of 2016 production as low as 14 million tons.

Normally, about 95% of Ukraine’s wheat production is winter wheat, however, producers can replant some failed winter wheat acreage to spring wheat