Global Hot Spots: Dry weather may cut Brazil's corn crop

Global Hot Spots: Dry weather may cut Brazil's corn crop

Less wheat in the Ukraine and Russia.

Bunge says dry weather may cut Brazil’s corn crop by 5 mln-10 mln MT – Reuters

Dry weather in Brazil may reduce that country's winter corn production by 5 million to 10 million metric tons resulting in a similar drop in exports from the world's No. 2 supplier of the grain, Bunge CEO Soren Schroder said in a Reuters’ story.

Brazil's second corn crop, known as the safrinha crop, is in its crucial pollination stage when hot, dry conditions can hurt yield potential. Analysts and forecasters had expected a record-large crop as recently as last month, but an early halt to summer rains has eroded prospects and prompted some to cut estimates.

Lower prices could limit use of fertilizer in Russia.

“It could be anywhere from 5 to 10 million tonnes of reduction and that comes straight out of exports and will therefore have to be supplied by the U.S. and/or the Black Sea, Ukraine in particular," Schroder said.

Brazil last week scrapped import duties on corn from countries outside the Mercosur trade bloc in an effort to curb record domestic prices and boost supplies of feedstock.

Ukraine to produce more corn, less wheat

Ukraine is forecast to produce 27.45 million metric tons of corn this year (July-June), up nearly 18% from the previous crop, due to more acreage and expected better yields, USDA’s attache said this week.

Meanwhile, wheat production is forecast at 24.5 million tons, down about 10%, due to fewer winter wheat acres and stable spring wheat production.

Corn exports are forecast at 18.5 million tons, up from 15.7 million, while wheat exports should decrease to 14 million from 15.5 million

“Ukraine continues developing closer economic ties with the European Union. This translates into growth of exports both for grains and products of the milling industry, which have been supported by a Tariff Rate Quota offered to Ukraine under the Deep and Comprehensive Free Trade Area (DCFTA), and this trend is expected to continue in the years to come,” the report said.

Russia may produce less wheat, corn in 2016

In its preliminary report for Russia, the USDA attache’s office predicts 2016 wheat production will decline about by about 3 million metric tons to 58 million, or 5%, from the previous year. However, the production will still be above the five-year average of 53 million.

Corn production is projected at 12.5 million tons, down 700,000 from 2015.

The attache projects overall grain and pulse production at 101 million tons, down 2% from the year before.

While many of the spring crops have yet to be planted, the forecasts are based on ideas yields could be affected by higher costs for inputs and labor, which may limit the use of fertilizer, agriculture chemicals and hybrid seeds and limit the buying of spare parts for machinery.

Global Hot Spots - April 22, 2016 - Less wheat in Canada

Global Hot Spots - April 15, 2016 - China's new corn policy to cut imports

TAGS: Wheat
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