Export Sales Announcement
Export sales of 189,000 metric tons of soybeans for delivery to unknown destinations. Of the total, 126,000 metric tons is for delivery during the 2018/2019 marketing year and 63,000 metric tons for delivery during the 2019/2020 marketing year.
Export sales of 122,000 metric tons of corn for delivery to Mexico. Of the total, 52,000 metric tons is for delivery during the 2018/2019 marketing year and 70,000 metric tons for delivery during the 2019/2020 marketing year.
Islamic State Terrorists Sabotaging Iraq’s Wheat Crop & Food Security
Since Iraq’s wheat harvest began in April, crop fires have raged across Diyala, Kirkuk, Nineveh and Salahuddin provinces. Many of these are believed to have been started by the Islamic state militants.
Iraqi officials in breadbasket province, Nineveh, warned that if the fires spread to storage sites it is estimated a quarter of this year's bumper harvest could be at risk, potentially ending Iraq's drive of self-sufficiency after years of disruption due to drought and Islamic State rule.
Islamic State has claimed responsibility for burning hundreds of hectares of farmland in the Iraqi provinces of Diyala, Kirkuk and Salahuddin as well as Syria.
The Iraqi government crippled by years of war and corruption does not have adequate resources to counter the destructive tactics of the Islamic State.
The hydrological configuration in Iraq this year was favorable which helped create a bumper wheat crop of 4.8 MMT.
What It Means for the U.S. Farmer: At FBN we believe that terrorists destroying the food security of a struggling and fragile country is most unfortunate. The U.S. wheat export program has economic incentives through preferential trade agreements with Iraq. Time will tell what Iraq’s final wheat production and stocks numbers are.
Russian Wheat Production and Exports Reduced
Citing dry weather, Russian agri-consultants IKAR and SovEcon both downgraded their forecasts for Russia's wheat exports in the new 2019/20 marketing season starting July 1.
IKAR downgraded its forecast for Russia's 2019/20 wheat exports by 500,000 tonnes to 36.5 MMT. Its estimate of grain exports was cut by 1.4 MMT to 46 MMT.
SovEcon cut it’s Russian wheat export forecast by 600,000 tonnes to 37.6 MMT million tonnes. The estimate of grain exports was cut by 500,000 tonnes to 48.9 MMT.
Russia is the world's largest wheat exporter and primarily exports its wheat and other feed grains to Africa, the Middle East and Asia.
IKAR and SovEcon currently expects Russia's 2019 wheat crop at 80 MMT and 82.2 MMT. This compares with a 72.1 MMT crop in 2018.
What It Means for the U.S. Farmer: At FBN we believe that these incremental adjustments are normal and should not pose a major threat to Russia’s 19/20 winter wheat harvest. The strong year-on-year increase in Russia wheat production and exports combined with the weak ruble versus the dollar has the ability to crowd out U.S. wheat exports which we believe can be a negative for the U.S. farmer.
The risk of trading futures, hedging, and speculating can be substantial. FBN BR LLC (NFA ID: 0508695)
