Ukraine Lowers Grain Export Forecast

Ukraine's Ag Ministry have lowered their forecast for 2009/10 grain exports from 20 MMT to 16-17 MMT, which is interesting on a couple of fronts.

Of that they've already exported 14.9 MMT this season, of which 7.3 MMT was wheat, 4.1 MMT barley and 3.4 MMT corn. That puts exports ahead of year ago levels by almost 10% when 7.1 MMT of wheat, 4.8 MMT of barley and 1.6 MMT of corn had been exported.

With the 2009/10 grain harvest 14% down on the bumper crop of 2008/09, it was always on the cards that cash-strapped Ukraine was going to have to slow up on exports sometime early in 2010.

With almost 15 MMT already exported this July/June marketing year, that leaves just a million or two to go over the next five months.

Early talk already suggests that Ukraine will struggle to match last season's clean weight grain harvest of 46 MMT this summer, due to early season drought followed by a subsequent deep freeze. More impact on production than that however is likely to come from a lack of fertiliser and pesticide usage due to cash shortages. So despite plantings being up for the 2010 harvest, final yields could be significantly lower.

That's the gossip doing the rounds at least, although it's far too early to quantify and it certainly isn't going to turn me into a raging bull overnight.

Meanwhile, whilst a rapid slow down in exports for the remainder of this season can't do any harm, it's likely to be of more benefit to Russia than it is to EU wheat looking for a home.