Ukraine Crop Report
Ukraine corn planting was reported up from 50% last week at 74% complete, versus 90% last year.
The government’s weather agency reported conditions during the first half of May were favorable for crop development, and crops are in good condition.
If trend yields are realized across a planted area projected near 5.5 million hectares, production would be near 38 million tonnes, up 8 million from this year.
APK-Inform kept its corn crop forecast at 35.7 million tonnes, compared to 30.3 million last year and the USDA’s projected 37.5 million.
The analyst also maintained its wheat crop forecast at 27.6 million tonnes, up from 24.9 million last year, but lower than the USDA at 29.0 million.
FBN’s Take On What It Means: Reversion back to a more normal growing season would lead to greater production from Ukraine. This increase has been taken into account in the world balance sheets which are expected to grow for corn and remain relatively stable for wheat. However, there is still much that can occur between now and harvest and it’s unlikely the market will take out all the risk premium in prices.
India Soy Production to Increase
Indian farmers are likely to expand their soybean planted area by 10%-12% in 2021 due to record high prices
In 2020, producers planted 11.83 million hectares of soybeans and produced 10.4 million tonnes.
Prices in India have more than doubled since the start of the season last October, and hit a record high last month on a sharp rise in soymeal exports.
The government’s weather office has forecast an average amount of rain for the 2021 monsoon season starting in June.
India’s potential increased soy production could limit imports of palm oil, soyoil and sunflower oil from Indonesia, Malaysia, Argentina and Ukraine.
It could also boost exports of soymeal to other destinations throughout Asia and the Middle East.
FBN’s Take On What It Means: India’s soybean production is set to rise in 2021, but domestic demand may also rise due to increased COVID cases as household demand for sunflower oil and soy oil rises in India during lockdowns. Palm oil demand, which is mostly used in restaurants, suffers due to closures. India is likely to remain the largest importer of edible oils, and while they don’t compete directly with the US, will likely add at least marginally to world exports.
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