Expectations for Ukraine’s and Australia’s Grain Crops Cut
The world grain harvest might not be as high as predicted as both Australia and Ukraine are expected to see lower output.
Abares, Australia’s official commodities bureau, states that the country’s total domestic wheat harvest is now believed to be 24 million tons – down from the previously expected 25.28 million tons as weather turns drier.
These cuts follow downgrades issued by private analysts, who are now expecting output levels between 23 million tons and 25 million tons, with GrainCorp and Commonwealth Bank of Australia both commenting that the lack of rain is causing more cuts to forecasts for grain quality and quantity.
There is also widespread doubt regarding a revision made within the past two weeks by the U.S. Department of Agriculture (USDA) in its latest World Agricultural Supply and Demand Estimates (WASDE) report which raised the department’s estimate for Australia’s output by 1 million tons to 27 million tons.
The WASDE report also raises questions regarding Ukraine’s output. The report places Ukraine’s corn harvest at 25 million tons – significantly higher than the 21.1 million tons estimate issued by the USDA’s Kiev bureau, and higher than the estimated crop of 22.9 million tons issued by Ukraine’s agriculture ministry, which represents a decline of 19.6% from last year’s harvest of 28.5 million tons. Indeed, the USDA is also forecasting a much larger crop than traders are willing to bet on, as traders are expecting a crop between 21 and 22 million tons after yields in Ukraine’s western regions have been disappointing ,according to Mykola Gorbachov, vice president of the Ukrainian Grain Association and director of New World Grain.