“Concerns surrounding Ukraine have also continued to be a driver of markets, with rapeseed continuing to push higher, alongside wheat and corn. UkrAgoConsult estimated that the corn area will be down 29% year on year, which is being viewed as an optimistic scenario,” finds a CRM Agri report.
There remains a minimal volume of theoretical exports, but the ability to export these with the country's ports closed, will likely be severely curtailed, said the team.
Since 2015/16, the corn area in Ukraine has been expanding, with strong demand from both the EU and more recently, China.
“The reliance upon Ukrainian corn can’t be underestimated, especially by the EU and UK where close to 50% of imported corn originates from Ukraine, equaling close to 1Mt in the UK and between 7Mt and 10Mt in the EU.
“With the majority of the remainder of imported corn into the EU originating from Brazil, totaling 4.7Mt and 4.2Mt in 2019/20 and 2020/21 respectively, the outlook for Brazilian second corn is becoming increasingly critical for EU, UK and indeed global feed grain supply next season.”
Current projections in Brazil are for a record harvest - forecasts for the country’s second corn crop stand at 86Mt, up near 26Mt from last season's drought-impacted corn crop.
After a brief pause in export sales of soy oil and meal out of Argentina, sales are now reportedly once again resuming, said the analysts. “As suspected, the pause in export sales has been to allow the government to intervene and increase taxes on exports, rising from 31% to 33%.”
Back to the US market, and a further sale of 240Kt of soybeans have been reported, said CRM Agri.
“US soybean exports have continued at an above expectation pace over recent weeks, watch out for a further potential tightening of on-paper US stocks.”