Mines Impede Planting in Ukraine, While EPA Eases Restrictions on Summer Ethanol Sales

Bloomberg writer Aliaksandr Kudrytski reported yesterday that, “About half of Ukraine’s land area needs to be checked for explosives left by Russian forces, highlighting the challenges farmers in the agriculture powerhouse face in planting crops at a crucial time in the season.

The roughly 300,000 square kilometers (116,000 square miles) that needs to be scoured ‘is almost half the size of our country,’ Oleh Bondar, the head of the pyrotechnical and de-mining division at the State Emergency Service, said during a video briefing on Monday. Authorities said Russia has used cluster munitions which scatter thousands of explosive elements over large areas

The Bloomberg article explained that, “Farmers in Ukraine — a major supplier of corn, sunflower oil and wheat — are struggling to plant spring crops because of the war and threat of mines, as well as a lack of fuel and fertilizers. That’s led to expectations of a huge drop in harvests this year. President Volodymyr Zelenskiy recently warned that Russian forces are striking grain and fuel storage sites in the country, which gets about 40% of its gross domestic product from exports like commodities.”

Kudrytski added that, “Ukraine may plant about 70% of the spring crop area this year, though that could expand to 80% if de-mining in the Chernihiv and Sumy regions is completed in the coming weeks, the Agriculture ministry estimates. Ukraine’s corn, sunflower-seed and wheat harvests are expected to slump by around 40% this year, according to the country’s grain association.”

Also yesterday, Reuters writer Pavel Polityuk reported that, “Ukraine’s traders union UGA expects the country’s wheat and corn harvest and exports to fall sharply because of the Russian invasion, it said on Monday.

“The wheat harvest could slump by almost 45% to 18.2 million tonnes while corn output could decline by 38% to 23.1 million tonnes, the union said.”

With respect to exports, Pavel Polityuk reported yesterday at Reuters that, “With blocked Black Sea ports, Ukraine is able to export 600,000 tonnes of grain and oilseeds a month, but may increase export capacity to 2 million tonnes, Ukrainian traders union UGA said on Monday.”

“Before the war, Ukraine exported up to 6 million tonnes of grain and oilseed a month, while in March the exports fell to 300,000 tonnes.”

Russian wheat exports also continue.

Reuters News reported yesterday that, “Russia, one of the world’s largest wheat exporters, has managed to continue exporting through its Black Sea ports despite the Western sanctions imposed on Moscow over the Ukraine crisis that have complicated trade logistics and payments.”

In news regarding production, Reuters writers Mayank Bhardwaj and Rajendra Jadhav reported yesterday that, “Bumper harvests and overflowing grain bins will help India to meet wheat import needs of the world’s top buyers as Russia’s Ukraine invasion hits supplies from the Black Sea region, a top government official said.

“India, the world’s second biggest wheat producer, is prepared to meet any extra demand for wheat from buyers in south Asia and Southeast Asia, and also from countries further afield in Europe, West Asia and North Africa. Ukraine is a major producer of grains but exports have been disrupted since the Russian invasion in February.”

And Dow Jones writer George Mwangi reported yesterday that, “Morocco’s wheat production is forecast to fall by 70% in the June-May marketing year due to dry weather conditions, the U.S. Agriculture Department said.

Looking at U.S. production conditions, a DTN article from yesterday summarizing Monday’s Crop Progress report, noted that, “Five percent of U.S. winter wheat was headed, compared to 4% last week, 5% last year and a 6% five-year average. Winter wheat condition improved to 32% good to excellent as of Sunday, April 10, two percentage points higher than last week, but considerably lower than 53% at same time last year.

“‘It is the second lowest such rating of the past two decades, next to a 30% at this time in 2018,’ [DTN Lead Analyst Todd Hultman] said. Kansas, Oklahoma and Texas have good to excellent ratings of 34%, 29% and 7%, respectively, he said. ‘Crops in Washington sport a 56% good-to-excellent rating,’ he added.

“USDA said 6% of the spring wheat crops were planted as of April 10, 2022, up from the five-year average of 5% for this time. ‘Washington leads the way at 32% planted while the major producer, North Dakota, is 2% planted with a blizzard in this week’s forecast,’ Hultman said.”

Meanwhile, Bloomberg writers Tarso Veloso Ribeiro and Megan Durisin reported yesterday that, “In the U.S., a ‘significant winter storm‘ may bring heavy snow to the northern Plains states beginning Monday night, according to the National Weather Service. Cooler-than-usual weather is also expected in the central U.S. next week, at a time when spring planting typically begins to accelerate.”

On the issue of wheat demand, Bloomberg writers Salma El Wardany, Abdel Latif Wahba, and Megan Durisin reported today that, “Egypt’s government plans to soon allow buying wheat outside of tenders as the biggest importer of the grain seeks more ways to secure supplies amid disruption from the war in Ukraine.

“The government currently only books cargoes via tenders and typically mostly from Black Sea countries like Russia and Ukraine, where flows have been upended by the war. It now wants to let companies to also be able to submit offers directly to the Supply Ministry, said people familiar with the matter who asked not to be identified because they’re not authorized to speak to media.”

In other news, Financial Times writers Lauren Fedor and Myles McCormick reported today that, “The Biden administration is temporarily lifting seasonal restrictions on the sale of higher blends of ethanol in petrol, in the White House’s latest effort to drive down prices at the pump.

“President Joe Biden will announce during a trip to Iowa on Tuesday that the Environmental Protection Agency will issue a national emergency waiver to allow E15 gasoline — petrol containing up to 15 per cent ethanol, higher than the standard 10 per cent — to be sold across the US this summer.

“Senior administration officials said that at current prices, using E15 could save motorists 10 cents a gallon on average.”