The winter harvesting campaign is in full swing across Ukraine, one of the most important producers and exporters of agricultural produce in Europe.
Expectations are high for record production this season, but adverse weather conditions in the first half of July threaten to take the gloss off crop quality and final yields.
As of July 23, Ukrainian farmers had reaped 14.1 million tonnes of winter crop grains off an area of 3.4 million hectares, putting the harvest progress at around 22 per cent of the planted area.
This is up from 5.5 million tonnes of harvested grain off 9pc of the planted area a week earlier.
Winter wheat made up the majority of the output with 8.86 million tonnes in the bin off 2.68 million hectares.
That is an average yield of 3.31 tonnes per hectare and constitutes 30pc of the forecast wheat area.
The winter barley harvest is the most advanced, with 1.9 million hectares already completed, 48pc of the total planted area.
Output to last Friday was 5 million tonnes, giving an average yield thus far of 2.63t/ha.
The pea harvest is 47pc completed, with 240,000 tonnes reaped off 110,000 hectares for an average yield of 2.18t/ha.
The bulk of harvest thus far has been confined to the south of the country, with the oblasts of Kherson, Mykolayiv and Odessa on the Black Sea 69pc, 60pc and 29pc completed, respectively.
Further east, harvest in the war-torn provinces of Luhansk and Donetsk is 44pc and 39pc completed, respectively.
The Ministry of Agrarian Policy and Food predicts the harvest of grain and legume crops in the 2021/22 marketing year will increase by 17pc compared to last season, to a record 75.8 million tonnes.
The forecast was made up of 37.1 million tonnes of corn, 28.5 million tonnes of wheat, 8.3 million tonnes of barley, 0.6 million tonnes of peas and 0.5 million tonnes of oats.
The International Grains Council released its latest global crop update earlier in the month, and they pegged total Ukrainian grains production slightly lower at 74.2 million tonnes.
It called the wheat crop 27.2 million tonnes, corn output 37.3 million tonnes, barley production 8.1 million tonnes, and the canola harvest 2.5 million tonnes.
The United States Department of Agriculture upped its Ukraine estimates earlier this month on the back of favourable June weather to 30 million tonnes for wheat, 37.5 million tonnes for corn and 9.2 million tonnes for barley.
A rebound in winter crop production will mean higher exports in the 2021/22 marketing year, particularly over the next six months.
The ministry of agriculture data released last week called total grain exports 56 million tonnes, including 20.7 million tonnes of wheat, 30.7 million tonnes of corn and 4.1 million tonnes of barley.
The International Grains Council was a little more conservative, forecasting total exports at 53.1 million tonnes, made up of 19 million tonnes of wheat, 29.6 million tonnes of corn, 4.3 million tonnes of barley and 2 million tonnes of canola.
The USDA has wheat, corn and barley exports higher at 21 million tonnes, 30.5 million tones and 5.2 million tonnes, respectively, on the back of their higher production expectations.
The latest official statistics put Ukraine wheat stocks at 1.74 million tonnes as of July 1, 4pc higher than a year earlier, and corn stocks have increased 13 per cent to 2.29 million tonnes.
Farmers hold 1.18 million tonnes, or almost 68pc of the wheat volume and 1.56 million tonnes, or just over 68pc of corn stocks, to open the 2021/22 marketing year.
On the other hand, barley stocks fell compared to the previous year to 1.07 million tonnes due to sustained export activity.
Exports of Ukraine barley to China increased significantly in the 2020/21 marketing year, with the Asian nation becoming the largest importer of Ukrainian barley.
This ended the long-standing dominance of Saudi Arabia as an export destination for Ukraine's barley, with the Middle Eastern country shifting to purchases of Australian and Russian supplies in the 2020/21 season.
Ukraine exported 4.15 million tonnes of barley in the 12 months to June 30 with 70.3pc, or 2.92 million tonnes going to China.
Saudi Arabia was the second-biggest importer at 320,000 tonnes, just 7.7pc of total exports.
The North African nation of Libya was just behind at 280,000 tonnes, or 6.6pc of total barley exports.
Export activity in the first three weeks of the 2021/22 marketing year has been quite buoyant, with over 1.66 million tonnes sailing from Ukraine ports.
Corn has been the flag bearer at 824,000 tonnes followed by wheat at 399,000 tonnes and barley at 426,000 tonnes.
How wonderful it is to see such data released to the market so quickly and such a pity it takes five weeks from month end to see the same export statistics released here in Australia.
The premium for Ukraine milling wheat over feed wheat continues to widen and is approaching a three-year high amid weather-induced concerns over new-crop quality.
The premium started to widen in mid-June after rain and above-average temperatures at the beginning of the month boosted the spread of plant diseases.
Combined with strong winds, widescale lodging became apparent in some areas, which generally reduces protein content.
Torrential rain in the Odessa, Mykolayiv, Kherson, Zaporizhshya, Dnipropetrovsk and Donetsk regions in the first week of July led to localised flooding events, slowing harvest and exacerbating the lodging problem.
The severe thunderstorm activity has continued over the past couple of weeks, with the rising water levels temporarily impacting some port facilities but are not drastically affecting export shipment operations.
According to media reports, around 3.2 million hectares of wheat and 1.4 million hectares of barley are affected by the wet start to harvest, 46pc and 57pc of the total area sown to these crops in Ukraine this year.
Early new-crop wheat samples suggest that feed wheat's share of this year's wheat harvest will most likely be higher than the 30pc seen in the 2020 harvest.
This is already making it difficult for exporters to accumulate sufficient volumes of milling wheat to cover their export commitments, pushing export prices for 12.5pc and 11.5pc protein wheat higher.
The spread between 11.5pc protein wheat and feed wheat in the spot export market has widened to around US$12 per tonne after touching US$14.50 per tonne on July 16, the highest since August 2018.
The widening of protein premiums is not restricted to Ukraine.
The severe drought conditions in Canada are having a drastic impact on global production of high protein wheat.
There are issues in the United States as well.
This is already influencing grade spreads here in Australia.
The flush season to date is not conducive to a high protein harvest so the recent trend could easily continue into the Aussie harvest if the seasonal conditions remain favourable.
The story Ukraine set for record crop if weather doesn't crash the party first appeared on Farm Online.