Hurricane Damage Impedes Export Market
The storm has disrupted grain and soybean shipments from the Gulf Coast, which accounts for about 60% of U.S. exports.
Widespread power outages and storm damage around New Orleans are expected to negatively impact grain shipping activity.
Hurricane Ida caused significant damage to a grain export elevator owned by Cargill Inc.
CHS Inc warned its grain facility may lack power for 2-4 weeks, while Bunge and ADM are working to assess damage to their area export facilities.
Cash premiums for grain delivered to the Gulf have fallen sharply as nearby demand has declined.
FBN’s Take On What It Means: It appears storm damage may delay shipments from some Gulf Coast ports for an extended period of time. Exporters are making alternate shipping arrangements, but fears of a prolonged recovery from the storm fuel concerns about a building supply imbalance as grain backs up at locations further up the pipeline. Cash markets are still under pressure, but are expected to stabilize relatively soon as buyers look to take advantage of the recent price decrease.
Sovecon Cuts Wheat Crop Again
The agency sees the Russian wheat crop at 75.4 million tonnes.
That is down 800,000 tonnes from the previous forecast at 76.2 million.
Sovecon cited lower spring wheat yields as the reason for this latest cut.
Dry weather has hit several regions in the country this year with the Ural and Volga regions set to harvest their smallest crops in years.
However, Siberia is expected to harvest a solid crop thanks to favorable weather.
About three-quarters of Russia’s wheat crop has been harvested.
Sovecon looks for Russia’s wheat exports to decline to its lowest level in five years.
Reports indicate Russia’s spring wheat quality could be one of the best on the books for the exporter.
FBN’s Take On What It Means: The Northern Hemisphere has not faced a lot of harvest pressure this year with global FOB values remaining elevated. This is partially thanks to a smaller crop out of Russia than previously expected. Weather will not be very impactful for the finishing out of the spring wheat crop but eyes will be on moisture for winter wheat seedings, which will start soon.
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