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Mixed views on Ukraine grain sales
The U.S. Grains Council and the U.S. Department of Agriculture both addressed the ever-changing political situation in Ukraine today, and there seems to be some difference of opinions concerning the short- and long-term realities of grain trade.
“Events in Ukraine will have a direct impact on U.S. farmers in the international marketplace,” said Tom Sleight, USGC president and CEO.
Ukraine reported a record corn harvest in the 2013/2014 marketing year of more than 30.9 million metric tons (1.2 billion bushels). The USDA projected in February that exports for the year will reach 18.5 million tons (728 million bushels).
Cary Sifferath, USGC regional director for the Middle East and Africa, estimates that approximately 15 million tons (591 million bushels) of this total has already been shipped, leaving approximately 3.5 million tons (138 million bushels) in projected exports between now and June. How this will be affected by the current turmoil is uncertain.
“Ports are open and vessels are loading, but shipments are becoming increasingly difficult,” Sifferath said. “We’re seeing farmers holding grain to hedge against a devaluing currency. We hope for a peaceful and speedy resolution of Ukraine’s crisis, but the instability is creating opportunities for additional U.S. exports to North Africa, the Middle East, and China.”
But, Joseph Glauber, the U.S. Department of Agriculture’s chief economist, says there are no indications of grain purchases shifting from the region due to buyers looking to other suppliers, according to the Wall Street Journal.
Brain Schouvieller, CHS North America vice president, doesn’t believe there should be an immediate impact on business. “I would say that, in the last 36 hours, things have calmed down considerably,” says Schouvieller. “I think people are thinking more of what their exposure is in that region, and are reassessing how much exposure they should have. You may see some small tweaks in position taking or in terms of carrying risk.”
When contacted by Agriculture.com, the spokeswoman for ADM was unable to confirm anything at this time, as they are still monitoring the situation.
Ukraine’s winter wheat and barley were planted before the onset of the crisis, but corn planting is due to start in the next 30 to 45 days, and credit availability may become an issue.
“The economic instability will affect Ukrainian farmers looking to plant this year’s crop,” Sleight said. “Ukraine is in a tough spot financially, and planting season is just around the corner. The council will continue to monitor this situation closely.”