Prices for corn reached their highest level for nearly five months as news of heavy rain damage to US crops drove soft commodity prices up. While the US harvest is down, this year’s yields from Ukraine land are bumper – almost 47 million tonnes are in, excellent news for investment in Ukraine land.
In Ukraine, the summer/autumn grain harvest has been excellent. By 12 November, Ukraine fields had brought in over 46.6 million tonnes of grain, a 10% increase on the Ukrainian authorities’
According to a spokesman from Kernal Holding, one of Ukraine’s major agricultural land companies, “Ukraine agriculture has delivered a good 2009 harvest”. Along with the good grain yields, sunflower crops from Ukraine land have also been excellent. On the back of this year’s harvest, almost 16 million hectares have been planted with crops for 2010, a similar area to this year.
While Ukraine land brings good news, things are not so bright in the US. In the world’s biggest corn exporter, the latest bad weather in key crop-growing areas means that this year’s harvest is significantly down. By mid-November, 46% of the US corn harvest was still in the fields and the recent heavy rain and snow mean that much of this harvest has been damaged or even ruined.
Torrential rainfall in Illinois – the second biggest corn growing state in the US and responsible for 16% of all corn exports – and heavy snow in northern Kansas and southern Nebraska have considerably curbed output as well as reducing the quality of the harvest. In addition, the wet weather has exacerbated the spread of a grain mould, further reducing the quality of the corn.
While too much rain is the cause of worsening harvest prospects in the US, too little rain is behind Argentina’s reduced yields this year. Like the US, Argentina is also a major player in the global grain market and its smaller harvest may also have played a part in the boost in grain prices.
Many crop-producing countries like Argentina have little margin for greater yields, usually because the investment in agricultural land is close to reaching its full potential. In others, however, there is still considerable room for greater productivity. Ukraine is one such country and the huge untapped grain production here means that those making investment in Ukraine land can expect results over the next few years to be even better than this year’s.
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