It didn’t start with the swing of an ax in the Amazon or by an explosion in Kiev. While both of those contributed, the shift happening in global grain flows is a multifaceted prism through which the picture of the future of grain delivery is continuing to evolve.
“This year, Brazil could take the crown of being the world’s largest corn exporter,” said Dan Basse, president of AgResource Company. “It took that crown for soybeans back in 2017.”
Global Acre Increase
This feat was set in motion by the U.S. drought in 2012 as higher prices encouraged more acres and pushed buyers to seek alternative supplies. While Ukraine has helped to fill some of that demand, the ongoing war and consequential infrastructure damage will make it hard for Ukraine to reclaim former volumes for some time.
“Ukraine, no matter what happens with the war from here forward, optimistically we’ll probably see corn and sunflower production 40% to 50% below normal,” Basse says. “The corn crop will probably be in the range of 18 million metric tons (MMT) or 20 MMT.”
Of course, that’s only possible if the negotiated shipping corridor remains open and transport vessels are willing to haul grain to its destination.
“It’s exceedingly unlikely Russia will pull out of this agreement simply because their allies, China, India and Iran, have a strong interest in keeping feed grains flowing,” says Matt Roberts, senior grain analyst with Terrain.
As Ukraine’s production sputters amid war, labor shortages, high fertilizer prices and diesel near $30 per gallon, other countries will help make up the shortfall. Wheat will come from the EU, Argentina, the U.S. and Russia.
