Market Morsel: Black clouds over the Black Sea
Market Morsel
SovEcon ups Ukraine’s 2021 corn crop forecast, issues first 2022 wheat crop estimate
SovEcon, a leading Black Sea agricultural markets research firm, has revised Ukraine’s crop numbers for 2021 and has issued the first 2022 wheat crop forecast. Ukraine is one of the top global corn and wheat exporters.
Corn crop upped by 1.5 mmt to 39.9 mmt on good yields
Corn production forecast has been upped by 1.5 MMT to 39.9 MMT, a new record-high. The country continues to report high yields. As of the last week, it harvested 73% of the area with an average yield of 7.05 mt/ha, which is close to the record. The yield is expected to grow further, reaching 7.3 mt/ha at the end of the campaign.
USDA estimates Ukraine’s corn crop at 38 mmt. In 2020/21 the country grew 30.3 mmt of corn.
Ukraine is the key US competitor in China’s corn market and one of the top suppliers of corn to the EU.
2022 wheat crop may decline to 27.1 mmt from 31.9 mmt on challenging fall weather conditions
SovEcon estimates the new wheat crop at 27.1 mmt, including 26.4 mmt of winter and 0.7 mmt of spring wheat.
The area under winter wheat is expected to decline by 0.1 mln ha YOY to 6.8 mln ha.
Winter wheat yield is estimated substantially below the trend, at 3.9 mt/ha. Winter crops condition have been the worst for recent years due to lack of precipitation and extremely dry soil. Some light rains recently helped plants a bit, but overall the wheat belt is entering it in bad shape.
A lot will depend on precipitation during the winter and spring.
The chance of having ideal weather in agriculture is very low. Recent dry weather helps the country to harvest its record-high corn crop but leaves 2022-wheat with minimal moisture reserves ahead of the winter.
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