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Ukraine Grain Exports Rise

Country harvested record 74 MT of grain in 2019

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Ukraine Grain Exports Rise 34% During the 19/20 Crop Year

Ukraine increased its grain exports by 34% to 31.1 million tonnes (MT) for the 2019/20 crop year which runs from July-June.

Ukraine harvested a record 74 MT of grain in 2019 compared with 70 MT in 2018.

Ukraine had a massive 35.5 MT corn crop this year which was just below the record 35.8 MT bumper crop in 2018/19.

Corn exports are at 12 MT. The USDA is estimating that Ukraine will export 30 MT of corn this year.

Wheat exports rose by 4.5 MT to 14.99 MT.

Ukraine has exported 3.7 MT of barley.

FBN’s Take On What It Means: At FBN, we believe that Ukraine’s record large grain production has been a negative for the U.S. farmer. In particular, the back-to-back bumper crops of corn combined with a strong U.S. dollar have challenged U.S. corn in the global export grids for most of the 2019 calendar year. Ukraine’s bumper wheat crop also presented some early season challenges for U.S. wheat in the global export market as well.

Bunge Sells Stake in Iowa Ethanol Plant

On December 31, Bunge sold its remaining stake in the ethanol refinery in Council Bluffs, IA to Southwest Iowa Renewable Energy (SIRE).

The sale represents an end to a 13-year partnership where Bunge held a 25% stake in SIRE.

The plant’s other owners are primarily agricultural producers in southwest Iowa.

SIRE is permitted to produce 140 million gallons per year and Bunge will continue to buy all of its ethanol.

FBN’s Take On What It Means: While not an immediate positive or negative for the U.S. farmer, we believe that Bunge’s reduced corporate exposure is indicative of the challenges that the domestic ethanol industry has endured. We also believe that the Trump Administration’s small refiner waiver (SRW) policy which provides blending exemptions for small refiners facing financial hardship are part of the broader challenges that have forced the hand of Bunge and other ethanol producers to leave the business.

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


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