Black Sea region. USDA bets on corn in season 2018/19


On May 10, the USDA published its first forecasts for the 2018/19 season, and they surprised market participants.

Regarding the Black Sea countries, the USDA experts forecast significant diversification in the grain market, concerning mostly Russia.

So, the USDA predicts a noticeable decrease in wheat plantings (down 5% at 26 Ml ha) in favor of corn (up 26% at 3.4 Ml ha) and barley (up 3% at 8.1 Ml ha). At the same time, UkrAgroConsult expects Russian corn acreage to change insignificantly.

For Ukraine, the USDA experts also forecast an expansion of corn and wheat plantings (by 4% to 4.6 Ml ha and by 1% to 6.7 Ml ha, respectively). Expectedly, they did it at the expense of barley (down 10% at 2.4 Ml ha).

For Kazakhstan, the USDA sticks to the Kazakh Ag Ministry’s plan for further reduction of wheat sowings and expanding those of barley. So, according to the USDA, the wheat planted area for the 2018 harvest in Kazakhstan will contract by another 4% to 11.5 Ml ha, while the barley area will increase 6% to 2.2 Ml ha.

Thus, the USDA forecasts the Black Sea region to lose its grasp on the wheat and barley markets but enhance its position in the corn market in the 2018/19 season.

According to the USDA estimates, combined production of wheat in the top three Black Sea countries will decrease by 11.3%, that of barley will lower by 8.4%, while their corn output will rise by 30.6%.

The USDA forecasts for the current season were somewhat adjusted as well. So, the 2017/18 wheat export estimate for Russia was raised by another 1 MMT and that for Kazakhstan gained 500 KMT. In addition, the barley export forecast for Russia was also increased (up 200 KMT).

More detailed information on the latest USDA updates are available to subscribers for weekly market report “Black Sea Grain” and “Online market review” by UkrAgroConsult.



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