USDA’s most recent World Agricultural Supply and Demand Estimates (WASDE) report lists concerns about the increased uncertainty of agricultural supply and demand conditions in Ukraine. Primarily, USDA expects lower exports from the region in most major crop exports, including wheat, corn and soybean.
One major prediction is the impact on wheat. World consumption of wheat is expected to raise 3.8 million tons to 791.1 million — unfortunately, global trade for 2022 is predicted to be lower due to issues in the Ukraine. Global wheat trade is expected to be 3 million tons lower — the report notes exports from the EU, Ukraine, the U.S. and Kazakhstan are not completely offset by higher exports from Russia, Brazil and Argentina.
Ukraine’s wheat exports were lowered 1 million tons to 19 million, due to the closures of its Black Sea ports caused by the invasion in February. Currently, global wheat stocks are projected at a five-year low.
Despite the increased need, the U.S. remains uncompetitive in wheat, according to the USDA’s Office of the Chief Economist.
“The U.S. wheat exports forecast is lowered 15 million bushels,” the office says in a tweet. “Exports would be the lowest since 2015-16, and the second lowest in 50 years.”
Corn and Soybean Shifts
In terms of coarse grain production, global production is forecasted 2.7 million tons higher to 1,5001.6 million, with foreign corn production forecasted higher with increases from Brazil, Indonesia, Pakistan and the EU.
In the U.S., the corn outlook is primarily for offsetting changes to feed and residual use, as well as corn used for ethanol production. Feed use is projected 25 million bushels lower, while corn for ethanol use is raised 25 million bushels, the report says.
USDA anticipates a lower corn forecast in exports for Ukraine, Serbia and Paraguay. Increases are expected for Brazil, Canada and India.
U.S. soybean supply and use shows increased export and seed use — including exports raising 25 million bushels. This predicted increase could offset lower exports from Brazil, Ukraine and Russia. Global production, however, is forecasted lower, reduced by 3.1 million tons.
The report says that the season-average soybean price is unchanged in April at $13.25 per bushel. Note, this report is on-going, USDA says, as the situation in both Ukraine and Russia continue to change.
Call for Lower Fuel Prices
The U.S. continues to worry about the situation in Ukraine and the ability to offset the loss of Ukraine’s exports. In addition, consumers and grower associations alike worry about the rising fuel costs across the U.S.
In a recent release, the National Corn Growers Association sent a letter to President Biden asking him to use the administrations authorities to tap more homegrown renewable fuels, like ethanol, to stable energy markets and lower fuel prices.
“We urge your administration to act to prevent consumers from losing access to a lower-cost fuel option on June 1,” the letter read. “As gas prices have increased following the rise in oil prices, higher ethanol blends have provided drivers with savings, with ethanol priced an average of 78 cents less per gallon than unblended gasoline at wholesale during March.
“If we replaced just one-third of regular E10 fuel sales with E15, we would fully replace all gasoline from previously imported Russian oil,” the letter continued. “When it comes to cost, blending more ethanol, not less, is an immediate step to help lower fuel prices.”
Soybean Overtaking Corn in U.S.
On April 4, the USDA’s National Agricultural Statistic Service 2022 Prospective Plantings reported that currently, soybean is predicted to overtake corn acreage in 2022.
Producers surveyed intend to plant 89.5 million acres of corn, which is a 4% decrease from 2021.
Meanwhile, soybean acreage is expected to jump 4%, reaching a record 91. million acres, with largest jumps in Missouri and Illinois.
Want to read more? Check Out:
Prospective Plantings Report Shows Soybean, Not Corn, New King Crop
Russian Invasion Could Cut Ukraine Planted Acres in Half
Reuters: Ukraine Grain Trade Threatened by Conflict
FAO: Note on the Impact of the War on Food Security in Ukraine
