The U.S. Department of Agriculture (USDA) in its August forecast improved the forecast of wheat harvest in Ukraine in the beginning of the 2023/24 marketing year (MY) from 17.5 million tons to 21 million tons, corn – from 25 million tons to 27.5 million tons due to larger than expected planted areas and the second highest yield in history.
At the same time, the document notes, due to the discontinuation of the Black Sea Grain Initiative, the export forecast was kept unchanged at 10.5 million tons and 19.5 million tons, respectively.
As a result, USDA for wheat raised the forecast for domestic consumption from 7.1 million tons to 8.1 million tons, and transitional residues at the end of MY – from 1.59 million tons to 4.13 million tons, while for corn, the entire crop growth forecast is balanced by an increase in expected transitional residues – from 1.89 million tons to 3.89 million tons.
Overall, the U.S. agency increased its forecast for this year’s feed grain harvest in Ukraine from 31.47 million tons to 33.97 million tons, estimating their exports at 21.37 million tons and raising the forecast for transitional residues from 2.27 million tons to 4.77 million tons.
In the update, USDA estimated last MY 2022/23 wheat crop, the same as a month ago, at 21.5 million tons vs. 33.01 million tons a year earlier, and exports at 16.8 million tons vs. 18.84 million tons, respectively, while reducing transitional residues from 5.27 million tons to 1.65 million tons.
The USDA sees the feed grain harvest falling to 33.93 million tons from 53.51 million tons in MY 2021/22, while exports fell to just 30.80 million tons from 32.93 million tons due to a reduction in transitional residues from 8.69 million tons to 2.15 million tons.
Including the corn crop, last MY’s harvest fell to 27 million tons from 42.13 million tons a year earlier, while exports rose to 28 million tons from 26.98 million tons, also due to a reduction in transitional residue from 7.59 million tons to 1.39 million tons.
USDA’s new forecast for the global wheat crop in MY 2023/24 is projected to reach 793.4 million tons, down 3.3 million tons from the previous forecast. Total wheat exports are forecast at 209.4 million tons, 2.23 million tons less than previously expected. Analysts projected final world wheat stocks at the end of MY at 265.6 million tons, 0.92 million tons less than the previous forecast.
For corn, the estimate for this year’s world harvest was lowered by almost 11 million tons to 1 billion 213.5 million tons, while exports were lowered by 2.07 million tons to 196.19 million tons.
The U.S. Department of Agriculture lowered its forecast for U.S. wheat production by 0.13 million tons to 47.2 million tons. Exports are expected at 19.05 million tons (-0.68 million tons).
Corn harvest is down 5.71 million tons to 398.82 million tons and exports are down 1.27 million tons to 58.65 million tons.
In the EU, USDA worsened its wheat crop estimate by 3 million tons to 135 million tons, keeping exports at 38.5 million tons.
For coarse grains, the EU crop forecast has been worsened by 6.85 million tons to 136.45 million tons and exports by 2.21 million tons to 10.59 million tons, with the estimated corn crop now down 3.7 million tons to 59.7 million tons and exports down 0.9 million tons to 4.1 million tons.
For Russia, the forecast for wheat exports at the same crop estimate of 85 million tons is increased by 0.5 million tons to 48 million tons, and coarse grains is kept at 8.91 million tons with the crop estimate lowered by 2.85 million tons to 39.4 million tons. Including corn, exports are still expected at the level of 4.2 million tons with a decrease in the harvest by 1.7 million tons – to 14.6 million tons.
Agrarian enterprises of Agrain group of companies have completed the harvesting campaign of winter wheat on the area of more than 14 thousand hectares, which are located in Odessa, Chernihiv, Cherkasy, Zhytomyr and Kharkiv regions, the press service of the agroholding reported.
“The plan for grain harvesting by farms of the agro group for 2023 is generally overfulfilled by 20%. Maximum winter wheat yield was obtained on the fields of LLC “Agrovit” (Cherkassy region) – 7.8 tons / ha and LLC “Agricor Holding” (Chernihiv region) – 7.0 tons / ha. The crop was harvested on time in all regions, even despite rainy weather at the end of July. Wheat grain, harvested this year, is of high quality and clean”, – the press service quoted the chief agronomist of the agricultural holding Slavko Stanisic.
Currently, work is underway to prepare the soil for sowing winter crops for the 2024 harvest. Agroholding enterprises are preparing for reaping sunflower and corn.
“Agrain” is engaged in the cultivation and storage of grain and oilseed crops, as well as animal husbandry. Before the full-scale Russian invasion, the agroholding included 11 agricultural enterprises and cultivated about 110 thousand hectares in Zhytomyr, Kharkiv, Chernihiv, Odessa and Cherkassy regions. The holding is owned by SAS Investcompagnie (France).
The Ministry of Agrarian Policy and Food of Ukraine has updated its forecast for gross production of grain and oilseeds. This year Ukrainian agrarians can harvest about 56.4 million tons of grains, as well as 20.3 million tons of oilseeds, the ministry’s press service reported.
“At the beginning of spring 2023, the total gross harvest for the current year was projected at 63.5 million tons, which was 13% less in relation to the indicator of 2022. In June, after harvest began, the forecast was raised to 68 million tons, which was 7% less than the 2022 figure. Now, thanks to favorable weather conditions, there is every reason for another change in the forecast in a positive direction to 76.7 million tons, which is 5% more than the figure of 2022,” – noted on the website of the Ministry.
According to the report, despite the fact that the total area of sown spring and winter cereals this year was less by 980 thousand hectares than last year and amounted to 10,895 thousand hectares, weather conditions contributed to almost record yields of grain crops (up to 51.8 c/ha), which allows to significantly increase the volume of crop production.
According to preliminary estimates of the Ministry of Agrarian Policy, in 2023 agrarians will be able to harvest grain in the following volumes: wheat – 20.9 million tons, barley – 5.8 million tons and corn – 28.1 million tons.
Gross production of oilseeds, according to the Ministry’s forecasts, will reach 20.3 million tons, in particular, sunflower – 12 million tons, rapeseed – 4 million tons, soybeans – 4.2 million tons.
Agrarians will harvest 13.7 million tons of sugar beet this year.
Ukraine has already harvested 12.5 million tons of wheat with record yields, but due to weather conditions 60% of the crop will be sold as fodder, which is twice as much as last year’s figure, according to the analytical cooperative “Pusk”, established within the framework of the All-Ukrainian Agrarian Rada (VAR).
“The key problem of the new harvest was its low quality: due to weather conditions, the grain has a low protein content. Most exporting countries also have problems with the quality of grain,” analysts said.
According to their information, the volume of feed grain in the season-2023 may amount to 60% of the new harvest. In previous years, this figure was at the level of 30%, and the remaining 70% was food grain.
Ukraine will get no more than 40% of high-protein wheat in 2023, which will affect prices.
“The spread between fodder and high-protein wheat is already $15-18/ton, in the future it may exceed $20/ton,” experts noted.
The current season will be problematic with the supply of food grain worldwide, stated the WAR and added that a lot of feed grain will be produced by France, Germany and the Russian Federation, which are experiencing problems with grain quality.
“Those who have high-protein wheat are selling to Lithuania, to Germany, and at small ports the supply is low. If last season the markets were surplus, traders dictated prices, now we are moving to a deficit model. Farmers are not taking wheat to the ports, and prices will rise,” the analysts explained.
They reported that prices in Danube ports on the basis of CPT are $170-175/tonne, by the end of the week they are expected at $180/tonne, and by the end of August may exceed $200/tonne.
“World demand is just starting to grow, there will be news of quality problems in other regions as well,” predicted the CAP.
Agrarians of all regions of Ukraine have harvested early grain and leguminous crops on the area of 3782 thousand hectares, having threshed 16 million 574 thousand tons of grain at a yield of 44 c/ha, the press service of the Ministry of Agrarian Policy and Food reported.
According to the report, in terms of threshing rates the agrarians of Mykolaiv and Odessa regions are leading, which threshed 1772.2 thousand tons and 2.009 million tons of grain, respectively. In these regions grain has been threshed on 82% and 64% of areas.
To date, Ukraine has harvested barley on 939 thousand hectares, which is 66% of the planned, of which threshed 3.755 million tons; wheat from 2.698 million hectares (60%) harvested 12.513 million tons; peas from 125.3 thousand hectares (87%) received 306.4 thousand tons.
In addition, on the area of 1182.3 thousand hectares (86% of the planned area) harvested 3319.8 thousand tons of winter rape.
The Ministry of Agrarian Policy changes weekly information about the yield of harvested crops and indicates its growth. Thus, for barley this week it amounted to 40 c/ha, and a week earlier 39.4%, wheat from 44.4 c/ha reached 46.4 c/ha, winter rape from 26.8 c/ha – to 28.1 c/ha. Only peas slightly “gave up positions” from 24.7 c/ha to 24.5 c/ha.
According to the report, agrarians of nine regions have completed pea harvesting. In Dnipropetrovsk region they have started harvesting buckwheat.
As reported, winter wheat sowing this season amounted to 4166 thousand hectares (-834 thousand hectares to the previous season), winter barley – 536 thousand hectares (-255 thousand hectares), rape – 1374 thousand hectares (+110 thousand hectares).
The Ukrainian Grain Association (UZA) has updated its estimate of the potential 2023 harvest, increasing it by 7.8 million tons to 76.8 million tons of grains and oilseeds, 3 million tons more than last year.
“The increase in this year’s crop forecast is due to favorable weather conditions and better-than-expected crop yields, although the area planted is 2.2 million hectares smaller than last year,” the association said in a statement on Thursday.
According to the updated forecast, exports from Ukraine in the new season 2023/2024 could potentially reach almost 48 million tons, while last season, which ended on June 30, according to UZA estimates, it reached 58 million tons worth about $20 billion.
It is specified that the 2023 wheat crop estimate has improved from 17.9 million tons to 20.2 million tons (2022 was 20.2 million tons and 2021 was a record 33 million tons). Potential wheat exports in MY 2023/2024 could be around 15 million tons, given the early season transitional residue of 4.3 million tons.
UZA also raised its 2023 barley crop forecast to 5.2 million tons from 4.4 million tons (10.1 million tons in 2021 and 5.8 million tons in 2022) and potential exports to 2.6 million tons.
Corn crop expectations for the new season have improved from 24.2 million tons to 26.9 million tons (2021 – 37.6 million tons, 2022 – 27.3 million tons), with potential exports of about 22 million tons, the report said.
According to it, the sunflower crop estimate for 2023 is raised from 12.7 to 13.9 million tons (2021 – 16.9 million tons, 2022 – 11.1 million tons), potential exports could be 1.1 million tons, and sunflower seed processing could be 12.5 million tons.
The UZA tentatively estimates the 2023 rapeseed harvest at 3.9 million tons and exports at 3.7 million tons, while the soybean harvest is expected to be larger – the estimate has increased from 4.4 to 4.8 million tons, and its potential 2023/2024 MY exports could reach 3.3 million tons.
UZA emphasizes that in general, grain and oilseed exports in the new 2023/2024 MY can be expected at the indicated level if Ukraine is able to export through its Black Sea ports and if logistics of alternative routes, including the Danube route, improve and become cheaper.
“Further impediments to grain exports from Ukraine will have a negative impact on the availability of grain on the world market and will lead to higher prices and, consequently, increased food inflation in the world. Moreover, in case of impossibility to export products, Ukrainian farmers may reorient their production and refuse to grow grain, which will further aggravate the crisis in the world food market in the medium term,” UZA said.
The Ukrainian Grain Association (UZA) is an association of grain producers, processors and major exporters of grain, which annually export about 90 percent of Ukrainian grain products.
