The fighting in Ukraine caused the U.S. Department of Agriculture to reduce its forecasts for grain imports globally, as well as exports coming from the Black Sea region.
In its latest monthly world supply and demand report, the USDA forecasts that 2022 world exports of wheat are expected to drop 3.6 million metric tons from last month’s estimate of 206.7 million tons, accounting for a disruption in vessel transportation out of Black Sea ports.
Imports from large buying nations like Egypt and Turkey are seen declining for both corn and wheat world-wide, the USDA said, largely due to the disruption of Russian and Ukrainian supply.
“Russia’s recent military action in Ukraine significantly increased the uncertainty of agricultural supply and demand conditions in the region and globally,” the USDA said in the report.
Grain futures trading on the Chicago Board of Trade are lower following the World Agricultural Supply and Demand Estimates release, although grain traders add that the high volatility in prices in recent days has put a lid on post-report movement. Corn is now down 2.3%; soybeans are down 0.5%, and wheat is limit-down by 7.1%.
Traders say that they expect future reports for the month to show the adjustment of trade flows to other nations to account for the absence of Ukrainian and Russian exports. “The focus going forward will be on the Russian war on Ukraine and the switching of ag trade to the Americas, Europe, Australia and Canada,” said agricultural research firm AgResource in a note Wednesday.