Just six short years ago unrest in the Ukraine might not have had nearly the impact on the U.S. corn market that has been witnessed in the last week. A significant bounce in corn futures can be attributed to the current events in that country involving Russia on fears that corn exports might not flow as freely.
“Ukraine is now a very major exporter in corn, where six years ago their exports hardly even hit a meter,” said Richard Brock with the Brock Report. “They’ve gone from say 2 percent of the world’s exports to 18-19 percent of the world’s corn exports, so that’s why it’s so important to Indiana corn farmers. Soybeans are just along for the ride right now, but history is being made over there right now but I think it is important to recognize that a lot of the people who are in that area of the country, particularly the eastern part, would like to go back to Soviet rule. They just never adjusted to capitalism and they don’t want to.”
Brock was in Ukraine last July with a group of farmers, and he told HAT that future moves by Russian leader Putin could again boost U.S. corn.
“You know since the Soviets turned rule back to the Ukrainians probably around 1989, I don’t think any further back than that, you’ve got a country that’s really divided. The western part of the country would like to side with Eastern Europe and the eastern side would like to go back to soviet rule. I think the best of all evils right now would be to let that happen. The question mark is whether or not Putin will want to come in and take over the entire country, which would reach havoc. It would also though if that happened probably be bullish the corn market.”
He said the part of Ukraine under Russian pressure doesn’t represent the major grain production area of the country. Those farm fields are to the north and west.
Brock was in Fort Wayne Tuesday talking markets with local farmers.
From the NAFB News Service: U.S. Grains Council President and CEO Tom Sleight says the events in Ukraine will have a direct impact on U.S. farmers in the international marketplace. According to the Council – Ukraine reported a record corn harvest in the 2013-14 marketing year of more than 1.2-billion bushels. In February – USDA projected exports for the year would reach 728-million bushels. Grains Council Regional Director for the Middle East and Africa Cary Sifferath estimates approximately 591-million bushels of that has already been shipped – leaving roughly 138-million bushels in projected exports between now and June. The impact of the current turmoil on this is uncertain. Sifferath says ports are open and vessels are loading – but shipments are becoming increasingly difficult. He says farmers are holding grain to hedge against a devaluing currency. While the Council hopes for a peaceful and speedy resolution of Ukraine’s crisis – Sifferath says the instability is creating opportunities for additional U.S. exports to North Africa, the Middle East and China. Sleight says the economic instability will affect Ukranian farmers looking to plant this year’s corn crop – as corn planting is due to start in the next 30 to 45 days. He says the Council will continue to monitor this situation closely.