SINGAPORE -- Brazil's corn output is expected to come under pressure this year as a result of dry weather, while high costs for fertilizers in strife-torn Ukraine will curb production there, a senior agricultural analyst says.
Lower supplies in Brazil and Ukraine, the world's second- and third-largest corn exporters after the U.S., would support global corn prices that hit multi-year lows at the end of 2014 on record U.S. and South American production.
"In Brazil, corn is being planted right now, we have to watch how that crop develops, as April forecasts are looking quite dry," says Emily French, managing director of U.S.-based consultancy ConsiliAgra.
"Brazil is producing a record soybean crop but they had some issues with the weather," she says.
In Ukraine, which is facing political turmoil, corn output could be hurt "as fertilizer cost is 45 percent higher and corn is a very expensive crop to plant," French says. "Maybe they could plant more wheat."
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Traders say fertilizer costs climbed for Ukraine and Russia on weaker local currencies, lowering the countries' chances of benefiting from the advantage over U.S. supplies provided by a firm dollar.
But a senior Moscow-based executive with cargo surveyor Cotecna says Ukraine was not totally reliant on imports for fertilizers, and corn prices would determine planting.
"If they think corn gave them better returns, they will plant corn, otherwise switch to other crops," the executive says.
Imports
Ukraine is expected to export 18 million metric tons of corn in 2014 and 2015, versus 5 million in 2010 and 2011, according to the U.S. Department of Agriculture.
Brazil is seen exporting 22 million metric tons in 2014 to '15, from 11.6 million in 2010 to '11.
The U.S. Department of Agriculture has cut its 2014 to '15 forecast for global corn output to 989.7 million metric tons, from 991.3 million estimated earlier. World corn production stood at 989.6 million metric tons last year.
Fewer supplies from Brazil and Ukraine could push corn to $4.50 a bushel from current prices of $3.80, French says.
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"I think the front-month is going to stay range bound, as it has been in 25 cents trading ranges since the middle of January," she adds. "It will continue that way until something happens which then is going to break it to the upside. If it started moving higher, you will have congestion at $4.50 a bushel. I wouldn't want to be long $4.50 old-crop corn."
