August 17, 2010

 

Russian livestock farmers may get US corn

According to the US Grains Council, some of Russia's top corn consumers are planning to import the grain from countries including the US, after the worst drought in at least half a century has hit the nation's crops.

 

"While the price of grain in Russia is high, it is expected to go higher, so no one is selling. This leaves many Russian animal farmers in a panic and fearful," said Alex Kholopov, a consultant at the council.

 

Corn has jumped 24% in Chicago since June 29 on speculation demand will increase from China and as wheat soared because of the Russian drought. According to the USDA, world stockpiles of coarse grains, including corn, sorghum, barley, oats and rye, will drop 8.4% before next year's harvest to the lowest level since 2008.

 

Drought in Ukraine, the fourth-largest corn exporter in the 2009-2010 season, and Russia may help the US increase its market share in countries such as Saudi Arabia and boost shipments of sorghum to the Middle East, Joe O'Brien, the council's regional director for the area, said.

 

According to USDA estimates, Russia will probably double corn imports to 300,000 tonnes in 2010-2011 from 150,000 tonnes the previous year, while exports may slump to 25,000 tonnes from 400,000 tonnes.

 

December-delivery corn was little changed at US$4.28 a bushel on the CBOT at 10:39 a.m. Singapore time today, while wheat declined 0.8% to US$7.2825 a bushel. Wheat has soared 59% since June 29, pushing its premium to corn to 70%.

 

Imports of corn are likely to increase to 1.5 million tonnes, raising the market share to 30% from 10%, it said. The council "received word" last week that Israel purchased 40,000 tonnes of US sorghum and intended to buy 60,000 tonnes to 80,000 tonnes more.