UKRAINE HARVEST PROGRESS AND EXPORT POTENTIAL

Following news published on 20 July by Kernel, the Company reports on the ongoing harvest throughout Ukraine.
 
The harvesting of wheat, barley and rapeseed in now drawing to a close. Throughout this harvesting period, and though temperatures in July were rather high, Ukraine was fortunate not to suffer from the extreme heat and dryness affecting Russia and Kazakhstan. This has resulted in a more limited negative effect on the overall production volume of these three crops, the total drop in production expected to be in the range of 16%, compared to an expected 25 to 30% year-on-year drop in Russian production.

With over 80% of wheat and barley crops now harvested throughout the country, we expect 2010 wheat production to reach 18 million tons, a 13.9% drop versus the 2009 harvest which stood at 20.9 million tons. Barley production is expected to reach 9.5 million tons versus 11.8 million tons in 2009, equivalent to a 19.5% fall in production. Not including carry-over stocks, export volumes for both crops are expected to total 10.0 million tons, compared to 15.2 million tons on the back of the 2009 harvest, a 34% year-on-year drop in exportable wheat and barley volumes.

The heat wave has however intensified of late, with temperatures approaching 40 degrees Celsius. Three important crops still have to be harvested in the period from September through October, namely sunflower, soybean and corn. Sunflower bears of course the most importance for the Company. To date, the weather has not had a negative impact on the sunflower crop and, provided the heat and dryness do not persist throughout August, we continue to expect a harvest in excess of 7 million tons for the season. Corn, on the other hand, could be affected by the present heat wave, and the 13 million ton USDA estimate (USDA, July 2010) could be significantly reduced.
 
Altogether, our forecast for the grain harvest, that is wheat, barley and corn, is now subject to the corn harvest, still more than a month away. As to sunflower seed, the Company remains confident on the state of the crop and availability of the feedstock to process in Company crushing plants throughout the 2010/2011 season.

source www.kernal.ua