October 23, 2019 | FBN Insights | Kevin McNew

Winter Wheat Planting Weather in Black Sea is Mixed

Winter Wheat Planting Weather in the Black Sea Is Mixed 

Drought-like conditions across most of Ukraine winter wheat producing regions is helping reduce planted acres for the 19/20 crop year.  

The Ukrainian agriculture ministry estimates that around 6.4 million hectares (MH) of winter grains have been planted verses about 6.8 MH during the same period in 2018.

Current planted area in the Ukraine includes 5.5 MH of winter wheat and 777,000 hectares of winter barley.  During the same time in 2018, farmers had planted 5.8 MH of winter wheat and 808,000 hectares of winter barley.

Conversely, Russia is experiencing favorable weather and is estimated to plant 17.5 MH of wheat for the 19/20 crop year, compared with 17.3 MH for the 18/19 crop year.

FBN’s Take On What It Means: We believe that the weather conditions in the Black Sea present mixed results for the U.S. farmer. Dryness in the Ukraine can limit winter wheat acres, but ideal conditions in Russia can help find acres for the 19/20 crop which can be a negative for the US producer.  At FBN, we believe that expansion of wheat acres in the Black Sea can be a negative for the U.S. producer and the KC futures market.       

        

      

China Offers Tariff Free Quota On 10 MMT of U.S. Soybeans

On Tuesday, Oct. 22 China offered to wave the tariff on 10 million tonnes (MMT) of soybean imports from the United States.  

The deal was offered to state-owned crushers and multi-national processors.   

The tariff free quota on imports represents the third time since August that the Chinese government has waived the 25% tariff. 

Despite the recent flurry of purchases from the U.S., Chinese importers have been busy booking fresh purchases of soybeans from Brazil.   

FBN’s Take On What It Means: We believe that the most recent waiver of the 25% tariff on U.S. soybeans has the ability to deliver confidence and support for the financial markets. At FBN, we believe that the tariff-free purchases represent encouraging developments in a prolonged trade spat between the two countries.       

        

The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)

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