What with the terrorist shootings in Canada, the Islamic State crisis in the Middle East and Ebola in West Africa dominating the headlines, the Ukraine-Russia conflict is getting little attention.
When the tensions there were soaring last spring, analysts predicted the financial disruptions would lead to reduced investment in seeding and smaller crops.
I pointed out that the winter wheat crops had already been seeded and the violence and financial problems would affect only spring-seeded crops, particularly corn.
Ukraine’s corn crop did fall, to about 25 million tonnes from almost 31 million the previous year, contributing almost all the reduction in the former Soviet Union region to 40.7 million tonnes, from 46.9 million the previous year.
Read Also
China’s grain imports have slumped big-time
China purchased just over 20 million tonnes of wheat, corn, barley and sorghum last year, that is well below the 60 million tonnes purchased in 2021-22.
However, the wheat crop in Ukraine at 24.5 million was the second largest ever, and Russia produced its third largest harvest at 59 million tonnes.
Exports from Ukraine this crop year are brisk. Russia’s exports were limited for a short period because its prices were higher than France, but its prices are again in line with the world market.
Looking ahead, weather has be-come a bigger threat to the region’s crops than politics, violence and economic hardship.
Winter wheat seeding in both countries is wrapping up. Conditions this autumn are fine in Ukraine, but soil in large parts of Russia is dry.
Analyst SovEcon said late last week that the current condition is worse than in the fall of 2009, when continuing dry weather, particularly a hot, dry spring in 2010, led to a harvest that was, at 41.5 million tonnes, down about 30 percent from the previous year.
SovEcon is predicting that the crop to be harvested next year could be as much as 15 percent smaller than this year’s crop.
It said the dryness had led to weak plants that are more susceptible to winter kill. Also, frosts hit in some areas before wheat fields had moved into dormancy.
Overall grain production could fall below 90 million tonnes from about 105 million this year, and the wheat crop could be less than 50 million tonnes, or about nine million tonnes less than this year.
The drought of 2009-10 lasted through winter into spring and summer.
Chicago wheat futures did not react until June 2010, jumping from about $4.50 per bushel to about $6.50.
Then on Aug. 5, the Russian government announced it would ban exports until the end of the calendar year. Chicago wheat futures in August rallied as high as $8.40. Prices stayed around $7.50 for most of the crop year.
Canada and Australia also had crop problems in 2010, which also helped support the price. And corn was in short supply, which kept a solid foundation under prices.
Russia’s weather troubles this autumn are not a guarantee of a poor harvest next summer.
Wheat is resilient, and good spring weather could generate a strong crop.
But this is the first potentially serious global production problem to arise in more than a year. Weather this year has created quality problems, but overall yields have been strong.
The Russian situation is unlikely to have much impact while the crop is dormant.
We’ll have to wait until next spring when the crop comes out of winter dormancy and damage can be assessed and growing weather monitored.
