Extended autumn boosts health of Ukraine grains

A prolonged autumn supported the condition of Ukraine grain and rapeseed crops heading into the country's harsh winter, besides helping growers to catch up on sowings more significantly than initially thought.

Ukraine's winter grains "have emerged almost on all the planted area", UkrAgroConsult, the Kiev-based consultancy said, estimating that only 6,000 hectares of crop has yet to appear, down from 328,000 hectares a year ago.

The extent of crop's progress comes despite a rain-hampered start to the sowing season, which prompted the country's farm ministry to forecast in early October that some 1.5m hectares of area earmarked for winter grains would go unplanted, leaving sowings at 6.2m-6.3m hectares.

Farmers play catch-up

In fact, a turn drier in the weather, and a late finish to autumn, has allowed growers to catch up on sowings, with UkrAgroConsult on Monday pegging the country's winter grains area at 7.82m hectares.

Ukraine winter grain plantings and (change on last year)

Wheat: 6.366m hectares, (-290,000 hectares)

Barley: 1.248m hectares, (+154,000 hectares)

Rye: 205,000 hectares, (-101,000 hectares)

Total winter grains: 7.819m hectares, (-237,000 hectares)

Source: UkrAgroConsult

The group last month pegged area at 7.73m hectares.

And it has helped crops planted even well after the usual ideal sowings window to establish, helped also by abundant moisture left over from the early-autumn rains.

The area of grain sowings which have yet to emerge has slumped to 6,000 hectares, down from 328,000 hectares a year ago.

'Winter crops have strengthened'

"Winter crops seeded after the recommended time have strengthened owing to 2-3 weeks longer autumn vegetation than usually," UkrAgroConsult said.

"In most of the fields, the sprouts are even, and their density is close to optimal due to sufficient moisture supply in autumn."

The group estimated the proportion of Ukraine grains in good or satisfactory condition at 91.7%, the highest in at least five years as of December 20.

For autumn-sown rapeseed too, crop condition is at the best since at least 2009, with only some 5% deemed in "poor" health, compared with more than 30% two years ago.

"Winter rape plants on 63.4% of area were well-developed when entering the winter. They have 6-8 leaves per plant and an 8mm-10mm thick root neck," UkrAgroConsult said.

'Less reluctant to sell'

However, while farmers have gained in crop condition, they are losing out on prices, with Tuesday's $15bn gas and loans deal with Russia seen as boosting sales by reducing the risk of devaluation.

Ukraine farmers have, like their peers in Argentina, hoarded crops, whose price is linked to the dollar, as a hedge against depreciation in the domestic currency.

"In Ukraine, the risk of devaluation is fading away, given the agreement with Russia," consultancy Agritel said.

"Farmers should now be less reluctant to sell their harvest," a dynamic reflected in a drop of nearly $5 a tonne in corn on an ex-farm basis.

"This price pressure could increase in the coming weeks, as the volume of transactions will be low at this time of Christmas season," Agritel said.

"Indeed, traders secured sufficient volumes for exports in the short term."

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