Market Perspectives March 28, 2014

Country News

Germany: German agricultural conglomerate BayWa AG is experiencing a positive boost from increasing global grain prices brought on by the continuing tensions between Russia and Ukraine, according to Reuters. BayWa annually trades 2-2.5 MMT of Ukrainian grain and is referring to the spike in grain prices brought on by supply concerns and fear of sanctions as the “Putin Premium”.

South Africa: Africa’s largest corn producer has raised its output forecast by 4.5 percent after good rains in February bolstered the crop, which would make the 2014 harvest the country’s largest since 1981, reports Bloomberg News. Farmers may grow 12.95 MMT of corn (5.95 MMT of yellow corn), which is an improvement over last month’s predictions of 12.4 MMT. This total would also be an 11 percent increase over last years 11.7 MMT. Farmers grew 14.4 MMT of corn in 1981. South Africa’s sorghum forecast was cut by 4.7 percent to 228,450 MMT.

Ukraine: As of March 24, Ukrainian farmers had sown 3.7 million acres of spring grain, according to Bloomberg News. This is 52 percent of the intended total area and is the fastest planting rate in six years. This development comes despite fears that the devaluation of Ukraine’s currency could force farmers to reduce purchases of inputs such as fuel, fertilizers and pesticides. Additionally, it is predicted that Ukraine’s corn harvest will total some 26 MMT, which is a 16 percent reduction from last season’s 30.9 MMT.