News
Marketers are watching Ukraine, South America
A marketing expert says traders are watching two growing regions very closely now.
John Heinberg with Total Farm Marketing tells Brownfield there is a focus on South American weather with dryness bringing down yield projections for soybeans and corn in Brazil and Argentina. “China might step in the back half here after we get through the South American harvest and be active in the marketplace, again, putting some pressure on us as U.S. producers to make sure we get things done in terms of a solid crop year for 2022.”
Heinberg says the border situation in Ukraine also has the attention of the markets. “The Ukraine situation is weighing heavily putting some definite strength into the wheat market. You know, about 12% of the global wheat supply comes out of the Ukraine, and 18% of the global corn supply on the export front comes out of that region so if something were to escalate, obviously, that’s going to definitely tighten up that export market.”
And he says some end-users that normally rely on Ukraine will likely buy some U.S. products, creating more competition. “And that’s why we’re seeing some of that price moving, and that’s what’s already going into place. Some of these end-users really got caught on the short side last year from those imports so this year they want to make sure they’ve got supplies locked in. That’s why we’re seeing the price jump.”
Heinberg says if the geopolitical situation settles down in Ukraine, then Ukraine’s producers are back in the competitive market but there are a lot of moving parts impacting that region right now.
Brownfield interviewed Heinberg during the University of Wisconsin Ag Outlook Forum.
