The heatwave in Ukraine will not have a major impact on the harvest of early crops, but we can no longer count on high yields of late oilseeds, including corn and soybeans, said Taras Vysotsky, acting Minister of Agrarian Policy and Food, during the Unified National Telethon.
He reminded that there are two types of crops grown in Ukraine – early and late. The harvest of early crops is already underway. We are talking about wheat and barley, as well as oats, peas, rye, and rapeseed.
“These crops are also subject to the heat effect, but it is not critical. They are even favorable for harvesting,” the acting minister said.
According to him, the average yield of early grain crops is 37 centners per hectare. However, it will grow as the harvest continues in the southern and central regions. In particular, Odesa, Mykolaiv, Kirovohrad, and Dnipro regions have already harvested more than 1 million tons each. Next, the western and northern regions will start harvesting, where yields will be higher.
As of today, the average yield of early crops is expected to be around 45-48 cwt/ha, Vysotsky emphasized.
“If we look at the later crops, which are primarily corn, sunflower and soybeans, there may be a negative effect of the heat, as it is the peak of flowering, pollination and growth of these crops. It all depends on the weather in the coming weeks. But as of today (it can be stated – IF-U), the current heat will not allow us to collect record figures for corn and sunflower,” said the acting Minister.
Vysotsky said that the production of early grains is expected to reach 27 million tons. The domestic consumption of this group of crops is about 6-8-9 million tons, which is three times higher than the domestic demand. Therefore, there will be no grain shortage in the country, and no sharp price fluctuations are expected.
At the same time, he said, the situation may change in the fall. In August, after the early grain harvest is completed, the situation with other crops will become clear.
“As of today, the price change is expected to be more at the level of inflation or devaluation, because these (crops – IF-U) are export-oriented goods. They are also tied to the hryvnia exchange rate. No sharp price changes are expected based on this levy (of early grain crops – IF-U),” the acting minister stated. He added: “The final forecast for the crop harvest will be made in the second half of August.”
The prices for soybeans in Ukraine fell by 1.5 thousand UAH/ton during the month and dropped to 16.5 thousand UAH/ton, due to the fall in world prices, according to the analytical cooperative “Start”, created within the framework of the All-Ukrainian Agrarian Council (AAC).
“In Ukraine, the prices for soybeans have been actively declining over the past month. If until the end of January, processors were buying soybeans at the price of more than 18 thousand UAH/ton, at the end of January, the price tags do not exceed 16.5 thousand UAH/ton. The price reduction of Ukrainian soybeans is due to the fall of the world prices for the oilseed,” the analysts stated.
According to their information, Ukraine exported 290 thsd tonnes of the contracted volume of 300 thsd tonnes in February. Traders find it difficult to sell Ukrainian soybeans for export due to its high price, the report said.
The key markets for Ukrainian soybeans, which usually account for 50-60% of exports, are Turkey and Egypt. However, while in these countries a ton of Ukrainian soybeans has always been $10-15 cheaper than Brazilian soybeans, now the prices have not only leveled off, but the prices for Ukrainian soybeans will continue to decline.
“World prices for the oilseed are falling, which is facilitated by a record harvest in Brazil, forecasts of a high yield in Argentina, and large soybean stocks in the United States,” the experts explained.
They predict that if the conditional prices for soybeans on the basis of DAP Poland-Romania are $420/ton, they may decrease to $390/ton by the end of March. In addition, the processors reduced the purchase prices per ton in the range of 16.5-16.8 thousand UAH, by the end of March the price drop may reach 16 thousand UAH.
“Another factor that supports the decline in prices for Ukrainian oilseeds is the fall in prices for soybean meal in the EU. In addition, Poland used to be the main importer, but now this country is not the best trading partner,” Pusk summarized.
Ukrainian ports on the Danube are now trading mainly in soybeans as the most marginal crop. Despite the constant decline in prices from exporters and local processors, soybeans are profitable for traders and farmers, according to the analytical cooperative “Start”, created within the framework of the All-Ukrainian Agrarian Council (AAC).
“Soybeans are actively contracted for October. There is a huge difference between the prices of Ukrainian soybeans and beans from Argentina, the US and Brazil: domestic soybeans are cheaper by 80-100 USD/t. Exporters, including Turkish and Egyptian ones, take advantage of this. However, Ukrainian traders are ready to keep prices low, i.e., they are “collapsing” the market for themselves. For traders, this is a supermarket culture, which is how they make money today,” the analysts said.
According to the report, even at low prices, soybeans bring profits to producers through any sales channels: sales to local processing plants, exports to the EU, and deliveries to small ports.
“In the next two weeks, the purchase prices of processing plants may drop to 12.5-13 thousand UAH/t, and at the Danube ports – to the conditional level of 340 USD/t. At the same time, the supply of soybeans will not decrease,” the UGA forecasts.
Kernel Agro-Industrial Group, as of mid-May, has fulfilled 95% of its plans to sow spring crops, allocating 35% of the area for sunflower and 18% for soybeans, the company said on Facebook.
“Agroclimatic features of the current season: a large amount of precipitation in March and April, a high level of subsurface water in some regions and, accordingly, the waterlogging of much of the fields – have significantly adjusted the production program of agricultural enterprises “Kernel”,” the company said in its information.
As reported, the sunflower accounts for 35% of sown area, or 120 thousand hectares, the corn – 24%, or 85 thousand hectares, the soybean – 18%, or 65 thousand hectares.
Moreover, winter wheat accounts for 17%, or 60.4 thousand hectares in the structure of areas under crops. Areas under rape and perennial grasses are traditionally insignificant, the holding said.
It is stated that Kharkiv cluster was able to carry out seeding on 28 thousand hectares, and another 1 thousand hectares were left without treatment because of security reasons, as these lands are located 40 km from the front line – in Kupiansky area. As of May 16, 100% of the planned areas for the season were sown in the cluster.
According to Alexander Zvyagintsev, deputy head of production of the Kharkiv cluster, 35% of the area is planted to winter wheat, 30% to sunflower, 15% to winter rape, 10% to corn, and 10% to soybeans.
Druzhba Nova” cluster team in Sumy region took 177 thousand hectares of arable land for the future harvest, while 7 thousand hectares near the Russian border were left uncultivated.
Druzhba Nova” cluster head for production, Igor Tihonchuk, said that corn and sunflower are already being sown; 20% and 35% of the crop is under crop cultivation correspondingly. Sowing of soybeans, which will take 24% of the area, will be completed by May 25. Sowing of winter wheat will occupy 17% of the area.
According to the holding, because of the oversaturated fields, some early spring technological operations have been canceled, replaced or shifted in time. The shift in timing affected the beginning of the sowing season, which in all regions began in late April, which is two weeks later than the traditional dates.
Kernel Agronomic reported favorable sowing conditions for sunflower and corn, which were sown in parallel to accelerate the pace of the sowing season.
“Most agroclusters have completed corn and sunflower seeding and are completing soybean seeding. This is a heat-loving crop, the conditions for sowing which were not favorable until May 5-6. Despite the vagaries of weather, 80% of areas for the next soybean crop we plan to sow at the optimum time for the crop, “- summed up the agricultural holding.
“Kernel” before the war was the world’s number one producer of sunflower oil (about 7% of world production) and its export (about 12%), as well as the biggest producer and seller of bottled sunflower oil in Ukraine. The company was also engaged in cultivation of other agricultural products and their sale.
In FY2022 (July-2021 – June-2022), the holding posted a net loss of $41 mln versus $506 mln net profit in the previous FY, while its revenue decreased by 5% to $5.332 bln and EBITDA decreased by 3.7 times to $220 mln.
Since the beginning of 2022/2023 marketing year (MY, September-2022 – August-2023) Ukraine exported 465 thousand tons of soybeans, which is 2.5 times more than the export figures for the same period last season and was the highest for the last three MYs.
Soybean exports in October 2022 amounted to 215 thousand tons, having decreased by 14% compared to the last month, but soybean volumes shipped to foreign markets in October exceeded last year’s October volumes by 24%.
It is specified that one of the reasons of export reduction in October was slowdown of trade in Ukrainian seaports due to uncertainty of “grain” deal prospects.
The main importers of soy from Ukraine were the EU countries (the share of 46%) and Turkey (37%), which increased the purchase of Ukrainian soybeans in September-October 2022, respectively, six times and two times compared to the same period of 2021/22 MY.
As it was reported, by November 25 in Ukraine 3.6 million tons of soybeans were harvested from 1.5 million hectares, which is 97% of the area sown with it. The average yield of soybeans was 24 cwt/ha
Two ships carrying more than 33,000 tons of soybeans left Ukrainian ports on Friday, the Joint Coordination Center (JCC) reported.
“Two ships left Ukrainian ports on Nov. 25, carrying a total of 33,165 tons of soybeans as part of the Black Sea Grain Initiative,” the report said.
The dry cargo ship Port Alberni will carry 26,765 tons of soybeans to Spain, the ship CS Cihan will carry 6.4 thousand tons to Turkey.
SKC notes that 28 loaded dry cargo vessels are preparing to be inspected in Turkish territorial waters to proceed further to their destinations.
“As of November 25, the total tonnage of grain and other agricultural products exported from three Ukrainian ports is 11,940,672 tons. A total of 983 vessels were allowed to move so far: 489 to arrive at Ukrainian ports and 494 to leave them,” the JCC stressed.
