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January 30, 2019 | FBN Insights | Kevin McNew

Ukraine Harvested Record Grain Crop Last Year

Combo of large feed grain and corn supplies and strong USD dollar should continue to displace US corn exports into northern Africa, Middle East

Ukraine Harvested Record Grain Crop Last Year

Total grain exports during the current marketing year from the Ukraine have risen by 3.8 MMT to 27.5 MMT from 23.8 MMT during the same point last year.   

Ukraine has said it harvested a record 70.1 MMT of grain last year, up from 61.3 million in 2017.  Exports could rise to by 7.8 MMT to 47.2 MMT during the July 2018 to June 2019 marketing year.

As of January 30, Ukraine has exported almost 12.2 MMT of corn as of January 30, compared with 7.6 MMT in the same period last season.  Wheat exports declined by .7 MMT to 11.5 MMT as of January 30.

What Does This Mean for U.S. Farmers? Assisted by strong supplies of feed grains, corn and barley, and a strong US dollar the Ukrainian corn export program will be one of the strongest on record. The combination of large feed grain and corn supplies and a strong USD dollar should continue to displace US corn exports into northern Africa and middle east destinations.           

Paraguay Weather Adversely Impacting Soy and Corn Yields

After a positive start to the year, the last week has brought continued dryness to core agricultural areas of eastern Paraguay.

Core provinces such as Alto Paraná and Canindeyú received up to 25  mm below average precipitation, while vegetation density as indicated by the latest satellite imagery continues to indicate significant downside to early season yield projections.

Values through January 15 indicate that major grain and oilseed production areas are now experiencing below-average vegetation indices, including record-lows in areas such as Canindeyú.

Corn crop estimates at 3.5-4.5 MMT are unchanged and vulnerable as  yields can trend lower.

Soy crop estimates are at 8.4 MMT and are vulnerable to further downside risk.    

What Does This Mean for U.S. Farmers? When compared to Argentina and Brazil, Paraguay is a smaller regional producer of corn and soy.  The financial markets have a tendency to overlook the Paraguayan crops but a further decline of both the corn and soy crops would continue to compress aggregate supplies in Latin America. With the entire agricultural community watching Brazil, corn and soy crops in Paraguay take a back seat.  This is more of an event to monitor but shouldn't move the regional supply needle.

 

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

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