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Eyes on Ukraine, South America

A Central Illinois cornfield is shown last spring / CIFN photo.

Ag exports out of Ukraine are on everyone’s mind following the recent Russian invasion of the country.

“Ukraine produces just shy of two billion bushels of corn annually and they export about 1.3 billion,” explained Jeremy Strubhar, senior broker with Advance Trading. “They have about 500 million yet to export of the crop they harvested in 2021.”

The big question is how much of that will get shipped and how much will be unable to be shipped due to the current war on the ground.

During an informational meeting hosted by Bank of Pontiac this week in Fairbury, Strubhar said protection is key, such as utilizing options to set price floors. He hopes farmers are covered in case prices move lower while maintaining an upside opportunity if the market should climb higher.

“If all of the exports are cut off and South America’s crop continues to be small, all that business needs to come to the U.S. and if we don’t have enough corn to meet that demand, prices will need to rally.”

The focus on our own upcoming U.S. growing season has been put on the back burner with all of the other news in the world. While input prices are high, acreage questions remain for 2022.

“On March 31, we have a planting intentions report which will give us the first indication of what the U.S. farmer does intend to grow,” said Strubhar.

Another big topic lately is South America and what is going on with crops down there as they have experienced an abnormally dry growing season.


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