Wheat exports from Ukraine in the upcoming 2023/24 marketing year (MY) will be 10 million tons compared to 15 million tons in the current 2022/23 MY, while corn will be 16.5 million tons compared to 25.5 million tons, the US Department of Agriculture (USDA) forecasts.
In its report, it is said that this is due to a smaller harvest and reduction of export stocks.
In addition, the USDA expects barley exports from Ukraine to decrease by 0.1 million tons in the upcoming MY – to 2.3 million tons.
Compared with the forecast of a month ago, the US Department of Agriculture improved its estimate of wheat export for this year by 0.5 million tons – up to 15 million tons, explaining it by better-than-expected performance of “grain corridor” and “lines of solidarity”.
As for the upcoming harvest, the USDA expects Ukraine’s wheat production this year to drop to 16.5 million tons from 20.9 million tons last year and 33.01 million tons in 2021.
He estimates that the harvest of other grains will fall to 28.67 million tons from 34.06 million tons last year and 53.51 the year before.
In particular, corn will be harvested 22 million tons compared to 27 million tons a year ago and 42.13 million tons in 2021, barley – respectively 5.9 million tons against 6.18 million tons and 9.92 million tons, oats – 350 thousand tons against 390 thousand tons and 478 thousand tons.
Slovakia has suspended processing of a batch of Ukrainian wheat due to a high concentration of pesticides, acting Slovak Agriculture Minister Samuel Vlchan has said.
Vlchan recalled that back in July 2022, he ordered to strengthen controls over Ukrainian grain. “Even before we started sealing all transit trucks with Ukrainian grain, a relatively large sample of Ukrainian grain was intercepted, and three independent accredited laboratories confirmed the presence of increased pesticide residues in it,” Vlchan was quoted by SME.
The batch of Ukrainian grain, which contained high levels of pesticides, was processed at one of the largest mills in Slovakia. The remaining 1.5 thousand tons of grain from this batch will not be processed.
By the end of this week the Slovak authorities will receive the results of the inspection of the found wheat batch, and it will be clear whether pesticide residues in it can affect human health.
If Ukrainian grain were to enter Slovakia through an EU member state, such as Poland, the control system created would make it possible to trace the purchase, Vlchan said.
“So we are trying to find the source of such wheat. However, if the wheat has already been milled, for example in Poland, we can no longer trace it. At the same time, we conduct spot checks even for such imports (of flour),” the acting minister of agriculture added.
Vlchan urged grain processors to be careful when purchasing agricultural products from countries outside the EU, including those legally imported into Slovakia.
Ports “Chernomorsk” and “Pivdenniy” within the framework of “grain initiative” on Monday sent 150 thousand tons of agricultural products by three vessels to Asian countries, the Ministry of Agriculture said on Monday.
“In particular, the bulk carrier ASL Ileana with 54,600 tons of wheat for Bangladesh,” the ministry pointed out.
The ministry said that Bangladesh remains a key consumer of Ukrainian wheat: since the beginning of the “grain initiative” the country has received more than 710 thousand tons of wheat from Ukraine.
“These volumes could have been higher if the Russians had not purposefully slowed down the inspection of ships in Turkey,” the ministry stressed.
According to the Ministry, there are an average of six inspections per day for both entry and exit ports, or half of the approved plan. In the Bosphorus, 94 ships are waiting for their turn to be inspected by the Joint Coordination Center (JCC).
A total of 848 vessels have left the ports of Greater Odessa since August 1, exporting 25.9 million tons of Ukrainian food to Asia, Europe and Africa.
“The Grain Deal” was concluded in Istanbul on July 22, 2022. The UN, Russia, Turkey and Ukraine signed two documents – on the creation of a corridor for the export of grain from three Ukrainian ports (Chornomorsk, Odessa and Pivdennyy) and on the removal of barriers to the export of Russian food and fertilizers for a period of 120 days with the possibility of extension.
On March 18, when the initiative was set to expire again, the UN said it would be extended. It did not specify any timeframe, but the Turkish press, citing claims by the Ukrainian side, reported that it was “an extension of 120 days,” while the Russian side insisted that the initiative had been extended for only 60 days.
Wheat prices on Monday fell to their lowest level since September 2021 on waning supply concerns in the short term.
Chicago wheat futures ended trading the day before down 1.6 percent to $7.1 a bushel. Since the beginning of February, the contract has fallen in price by about 6%, a record pace since November.
As Bloomberg notes, amid the war unleashed by Russia, Ukraine is seeking to extend the Black Sea Grain Initiative for another year.
Traders believe the deal will be successfully extended and the expectation of an active grain supply from the region is putting pressure on futures, notes Terry Riley, senior commodity market analyst at Futures International LLC.
In its February report, the U.S. Department of Agriculture (USDA) raised its forecast for corn exports from Ukraine in 2022/2023 marketing year (MY, July-June) by 2 million tons, compared to January data, to 22.5 million tons from 20.5 million tons, and wheat exports by 0.5 million tons, to 13.5 million tons from 13 million tons.
According to a report on the U.S. Department of Agriculture website Thursday, the forecast for corn production in the current MY is maintained at 27 million tons and wheat at 21 million tons.
Also in the February forecast, the estimate of transitional corn balances in Ukraine at the end of 2022/2023 MY was reduced by 2 million tons to 3.39 million tons from 5.39 million tons, and by 0.5 million tons for wheat to 4.21 million tons from 4.71 million tons.
At the same time, the estimate of domestic consumption of corn in Ukraine in 2022/2023 MY remained at 5 million tons, and wheat – 4 million tons.
In general, the forecast of feed grain exports in Ukraine in 2022/23 MY in the February forecast was increased by 2 million tons – to 24.93 million tons from 22.93 million tons in January, and the forecast of its production was kept at 34.16 million tons.
As reported, Ukrainian agrarians by February 3, 2023 harvested 78.93 million tons of major crops from 18.46 million hectares, including 53.2 million tons of grain and leguminous crops. Wheat in 2022 harvested 20.2 million tons from 5 million hectares, and corn – 25.9 million tons from 3.9 million hectares.
Ukraine from the beginning of 2022/2023 MY to February 3, exported 27.46 million tons of crops, which is 29.8% less than the same period of the previous MY. External markets supplied 15.68 million tons of corn (-2.1% compared to the same period last year), 9.84 million tons of wheat (1.75 times less), 1.83 million tons of barley (3 times less), 12.8 thousand tons of rye (12.3 times less) and 85 tons of flour (+33%).