EU Corn Forecasts Reduced
- EU crop monitor MARS forecast average EU corn yield at 7.83 tonnes per hectare, down from 8.01 tonnes last month.
- The corn crop would still be 3.3% above the five-year average.
- France’s ag ministry reduced the corn yield estimate to 8.97 tonnes per hectare from 9.13 tonnes last month.
- The lower yield was partially offset by an increase in the projected area to 1.57 million hectares, up from 1.55 million in August.
- In Ukraine, UkrAgro’s current production estimate is 35 million tonnes versus 36 million last year and the current USDA forecast at 38.5 million.
- ProAgro lowered its estimate of Ukraine’s corn crop to 34.0 million tonnes from 38.9 million previously.
FBN’s Take On What It Means: In south-eastern Europe, severe drought conditions continue in eastern Romania, eastern Bulgaria, and southern Ukraine, with further negative impacts mainly on the corn crop. USDA lowered its Ukraine corn forecast in the last report, but most private analysts are projecting the crop even lower. If realized, this will lead to lower exports there and an opportunity for the US to gain some sales.
China Continues to Buy U.S. Pork
- China's pork imports increased by 75% in 2019 and have continued to climb in 2020.
- An outbreak of African Swine Fever in Germany, a major pork exporter, has resulted in bans from several countries, including China.
- German pork exports to China are worth around 1 billion euros ($1.2 billion) annually, and volumes had doubled in the first four months of this year.
- Year to date, the US has exported a record 1.775 million tonnes of pork with China accounting for 36% of the total.
- In August, Brazil sold 50,700 tonnes of pork to China, up 168% from the same month a year ago.
- Many EU suppliers also lack excess capacity, with Spain being a possible exception.
FBN’s Take On What It Means: The ban of German shipments should provide a major opportunity for competing exporters, the US among them. US hog slaughter was lower earlier this year due to the coronavirus slowdown, but is now nearly back to pre-pandemic levels. US pork exports to China have fallen off the previous pace, but while other exporters have strained capacity, the US still has room to expand as it has increased production to a new high this year.
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