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NAPERVILLE, Ill., Oct 18 (Reuters) - Ukraine’s grain exports have recently increased to within striking distance of the year-ago numbers, but that could be a brief phenomenon as the recent harvest is significantly smaller than last year’s record. October grain shipments through Monday of 2.12 million tonnes were just 2.4% below the same period a year earlier. Still, Ukraine’s total grain exports for the 2021-22 year ended June 30 rose 8.5% on the year, but 2022-23 is well behind last year’s pace even with the October boost. Old corn could continue padding near-term corn shipments despite an incoming harvest down 25-40% on the year. Russia’s invasion of Ukraine sent wheat prices to new highs as the two countries could previously account for nearly 30% of global wheat exports.

Crop Watch producers have been evaluating yield potential for their corn and soy fields on a weekly basis since early July. CORNThe third and fourth harvested Crop Watch corn fields, Indiana and southeastern Illinois, were both completed on Sunday, and the results diverged. Indiana was among the driest Crop Watch locations this summer, but soil moisture was high at the start of the season, delaying planting. Crop Watch corn fields could be completed this coming week in Nebraska, eastern Iowa and North Dakota. Photos of the Crop Watch fields can be tracked on my Twitter feed using handle @kannbwx.

U.S. corn yield is now nearly 10 bushels per acre lower than the earliest projections, though the trade has anticipated that decline very well. Analysts have nearly nailed the last two corn yield estimates, their best-known performance for these months. When considering all of the past 20 years, U.S. soybean yield in January was lower than in October eight times. This is the third month in a row where USDA’s corn yield is lower than in the previous month. In the last 20 years, U.S. corn yield was lower in both September and October four other times, most recently in 2020.

U.S. corn and soybean yields will be of top priority in Wednesday's reports, due at noon EDT (1600 GMT). Corn yield was lower in just five of the last 20 Octobers, most recently 2016 and 2012, the latter decent company for 2022. The Midwest this year recorded its driest September since 1979, though drier Septembers have not necessarily promoted lower soy or corn yields in October. Nine of the 11 Crop Watch soybean fields yielded at or just below pre-harvest expectations. Crop Watch corn harvest is only starting, but nationally the pace is 1 point ahead of average.

Crop Watch soybean fields still await harvest, but those should be finished early this week as most producers’ harvest paces are ahead of normal. The western Illinois corn last week became the second completed Crop Watch corn field, and the final yield score ended at 4.5, a quarter-point below expectations. Crop Watch producers have been evaluating yield potential for their corn and soy fields on a weekly basis since early July. Ohio is the only Crop Watch location where harvest pace has been a little slow as crops are still holding moisture from late-season rains. Photos of the Crop Watch fields can be tracked on my Twitter feed using handle @kannbwx.

Based on U.S. export inspection data, the United States exported roughly 145 million tonnes of grain and oilseeds in calendar year 2021. In 2021, some 42% of October-December soybean shipments to China left from the U.S. Gulf versus 52% from Pacific ports, though the Gulf share was 58% in 2020. Through 29 days of September, soybean sales to all destinations of 3.1 million tonnes were an 11-year low for the month. About two-thirds of all U.S. grain shipments to Mexico are shipped via interior methods such as rail, but the other third relies on the Gulf. Interior exports accounted for 14% of all U.S. grain and oilseeds last year, third behind the Gulf and Pacific regions.

Competitively priced South American offerings have recently undercut U.S. business and the upcoming Brazilian soybean harvest looms large, increasing pressure on U.S. soybean exporters’ performance through the end of the year. The U.S. soybean harvest is likely picking up this week, so any logistical interruptions are poorly timed. Soybean export inspections are already lagging more than expected, having fallen below the range of trade estimates in three of the last five weeks. Argentine farmers for the first time in six years may increase soybean area for the upcoming season, potentially boosting output more than 15% on the year. Brazil’s recent record-large corn harvest has lifted shipments to or near all-time highs in the latest two months.

However, cooler temperatures this week in eastern areas could slow things down, which was already a factor this past week for the Crop Watch locations in Indiana and Ohio. The Kansas Crop Watch location got more than an inch of rain this past week, helpful for winter wheat planting prospects. The 11 Crop Watch corn fields were planted an average of 11 days later than in 2021 and the soybeans 12 days later. The 2019 season also featured similar challenges, but soybeans were the bigger problem that year for the Crop Watch producers. Photos of the Crop Watch fields can be tracked on my Twitter feed using handle @kannbwx.

Most-active CBOT corn futures rose 15% in those eight weeks, remaining just under $7 per bushel at their peak. Corn futures settled at $6.76-3/4 per bushel Friday, easing with broader commodities and equities, though they remain at the second highest levels for the date behind 2012. Subpar global crops have supported corn futures, but demand concerns loom. Money managers’ bullish CBOT soybean meal views are easily record high for the date, surging by more than 14,000 contracts through Sept. 20 to 102,168 futures and options contracts. That was associated with a 3.7% jump in futures, and it was funds’ biggest meal buying week since November.

A sign advertising E15, a gasoline with 15 percent of ethanol, is seen at a gas station in Clive, Iowa, United States, May 17, 2015. The government and labor unions reached a deal last Thursday that averted a railway shutdown, possibly supporting a rebound in ethanol output for the current week. But a near-term recovery may be capped by sagging U.S. gasoline demand and poor corn crop prospects. Some analysts have questioned these figures, based on recent traffic trends that might suggest better fuel demand, though high prices have pained consumers for much of this year. A subpar U.S. corn crop could also disrupt the ethanol industry, especially if harvest results are worse than expected.

Excluding Russia's 91 million-tonne crop projection, USDA shows 2022-23 world wheat output dropping nearly 2% on the year, placing more weight on Russia's crop success and its ability to access world markets. China is routinely excluded from world wheat analyses because of its small part in global trade compared with its massive stockpiles, which will account for a record 54% of global wheat supply by mid-next year according to USDA figures. That major exporter ledger does not include India or Brazil, who have been increasingly relevant in global trade and could potentially expand that footprint. But adding them in does not change the previous conclusion: 2022-23 world wheat stocks-to-use is still set for a 15-year low. Wheat stocks-to-use in major exportersKaren Braun is a market analyst for Reuters.

Crop Watch corn and soybean fields is right around the corner and producers have mixed feelings heading into the busy season, which should pick up speed within the next two weeks. Scores will be finalized upon harvest and final Crop Watch yields a few times in the past have surprised high or low by more than a point. Only three Crop Watch soybean fields are seen besting last year’s final yield scores: Minnesota, western Illinois and Indiana. Photos of the Crop Watch fields can be tracked on my Twitter feed using handle @kannbwx. Crop Watch Producers 2022Karen Braun is a market analyst for Reuters.

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