Ukraine Planting And Harvesting Seasons Are Very Similar To The U.S.
DAVID REINBOTT
BENTON, MISSOURI
Prices were not as volatile this past week as they were the past several weeks. Prices in general pulled back and held the major price support levels on the charts.
The war and invasion in Ukraine continues to be an important factor in price direction. As everyone knows by now, that Ukraine is a major of exporter of wheat and corn. This should make U.S. corn and wheat more valuable and in more demand throughout the world. Depending on how long this invasion continues, it puts in question if Ukraine will even plant a corn crop this year.
We are entering the planting season for the spring planted crops in Ukraine. The planting season for corn, millet, rice, soybeans and sunflowers are from mid-March through early June. The harvest would be from September through December. Winter wheat and winter barley is planted from September through November and harvested the following July through September. Their planting and harvesting seasons are very similar to the U.S.
In 2021 Ukraine planted 13 million acres of corn, a yield of 127 bushels/acre, and a production of 1.65 billion bushels. They produce only 3 percent of the world’s corn. However, they export 80 percent of their production or 1.32 billion bushels which makes up 17 percent of the world’s exports. Similar numbers for wheat. They produce 33.0 mmt or 4 percent of the world’s wheat production. However, they export 72 percent of their production which is 12 percent of the world’s wheat exports.
Another very important factor in price direction will be the upcoming March 31 USDA planting intentions report. Many in the trade are projecting 180 million total acres of corn and soybeans will be planted in the U.S. this spring. What that mix that will be is still uncertain and will it be enough to meet the demand. This will also impact the acres of cotton and rice that will be planted in the U.S.
This was reflected in the price strength in new crop cotton and rice prices this past week.
We need to continued watch the weather developments in South America.
We know the La Nina weather pattern resulted in a drought in southern Brazil, northern Argentina and Paraguay and impacted their soybean and corn production. However, we are not sure how much it cut production and how much improvement did the late rains have.
The northern regions of Brazil had the opposite weather of too much rain. It delayed their harvest and their exports. The second crop corn got planted timely and April will be a key month in its development and yield potential. Right now, the moisture is good and they are looking at a good crop at this time. The key will be the growing conditions going forward.
In the U.S., it remains dry in the western plains and the major hard red winter wheat growing regions. There is rain forecasted for this week. However, one rain does not break a drought and more will be needed. Also, it is dry in Texas and that will have an impact on the cotton acres planted and harvested. The dry weather could result in more cotton acres planted but if the drought continuous it could lead to more acres than average abandoned.
U.S. exports sales and shipments need to be watched. Corn and soybean sales remain strong for this time of the year.
On March 17, the National Weather Service updated their summer forecast and they are forecasting above normal temperatures for all the crop growing regions and below normal precipitation for the western growing regions. It is important the U.S. gets trendline or above yields to meet the U.S. and world demand.
There is also many other factors in the U.S. and the world that will impact crop prices including the overall uncertainty what is happening in Russia and Ukraine, COVID-19 and all the variants, inflation, interest rates, economic growth, energy prices, crop acres planted this spring, biofuels, and etc, and etc.
Anytime prices go up quickly and significantly, there will be a pull back and reassessment period to determine if anything has changed in the supply and demand situation. We are hearing more about demand destruction and significant rationing of agriculture products due to the high prices.
Because of all the unknows it makes marketing old crop and new crop very challenging. For the old crop, scaling in sales is still a wise thing to do. A farmer could also use a close below an important moving average or price floor to make some sales. For the new crop, scaling in a few sales is not a bad idea but have price floors under the market when prices do turn lower.
Technically, I like to use trend lines to determine price support and resistance levels. From there, I use the moving averages for more intermediate to short term price support levels. To signal buys and sales I use candlestick patterns and signals. I have found that closes below the 8 and 17 EMA are good signals to make sales when used in conjunction with the other technical indicators and make buys when prices close above 8 and 17 EMA. ∆
DAVID REINBOTT: Agriculture Business Specialist, University of Missouri Extension