Grain exports from Brazil and the US to the European Union have tripled since Russia’s de facto blockade of Ukraine’s ports in March, helped by high temperatures across the EU, according to market data. Brazil’s year-over-year exports leapt to 2.2 MMT for July, while US volumes soared to 1.1 MMT, a Braemar ACM Shipbroking report said. July’s grain exports from Australia rose 13.2% from a year ago. This increase puts Brazil, the EU’s largest grain supplier, on track to export 26.4 MMT to the bloc during the 2022/2023 marketing year that began in June, compared with 8.8 MMT in the prior marketing year.

The drop in volumes from Ukraine also boosted projected US volumes to the EU to 13.2 MMT for the 2022/2023 growing season, up from 4.4 MMT in the 2021/2022 marketing year. Ukraine was the second-biggest exporter at 8.4 MMT during 2021/2022 marketing year, but the Russian siege has lowered export volumes to 500,000 tonnes even after the maritime grain corridor opened on 1 August.

Record-high temperatures this summer have also boosted Brazil and US grain exports to the EU, where there were water restrictions and limited irrigation across France, Italy, and Spain, Braemar noted. The heat, in conjunction with the Russian blockade, forced EU countries to import 46.5 MMT of mostly maize in the 2021/2022 marketing year, up 12% from the previous 12 months. EU grain production has also dropped, so it is expected to increase maize imports by 18.8% to 19 MMT and wheat imports by 12.2% to 5.5 MMT. EU grain exports, mostly of wheat, increased to 5.4 MMT in July, up 47.7% from a year earlier. But the blockade of Ukrainian ports and sweltering summer temperatures across the US and Argentina may hurt global maize and barley exports during the 2022/2023 marketing year, according to the United Nations’ Food & Agriculture Organization. “Although larger expected maize shipments from Brazil and higher demand from the EU have boosted global maize trade prospects since the previous report, FAO’s forecast for global maize trade in 2022/2023 stands 3% lower than the 2021/2022 level,” it said in a July report. As a result, the higher grain exports expected from Brazil may still fall short of compensating for smaller shipments from other countries.

Global wheat trade during the 2022/2023 marketing year is expected to fall by 1.3% to 191 MMT, mainly due to lower Ukraine exports and smaller purchases forecast across Asia. But the opening of the Ukraine grain corridor from the ports of Black Sea ports of Odesa, Chornomorsk and Pivdennyi may offset the expected shortfall, if Ukraine, Russia, Turkey, and the EU continue to agree to keep it open, the US Department of Agriculture said. In its latest monthly report on global grain trade, the department said: “While there is cautious optimism about the deal, several roadblocks exist, namely continuing conflict in and around port infrastructure (including transshipment silos), the demining of ports and routes and persistent high logistical costs related to freight and insurance rates. Grain exports from Ukraine in the past have been highly seasonal, with the largest volumes shipped just after harvest.” Based on this expectation, the department raised the 2022/2023 forecast on Ukrainian maize exports to 12.5 MMT from 3.5 MMT and on its wheat exports to 11 MMT from 1 MMT. “As of this publication, about a dozen ships have left Ukrainian ports, primarily loaded with corn [maize],” it said. “Despite the aforementioned roadblocks to the success of the Black Sea grain corridor, this potential relief valve for Ukrainian grain supplies comes at a timely moment, as exports historically pick up substantially over the next several months.”