The Black Sea region faces reductions in its grain harvest due to moisture concerns and political uncertainty, says Olivier Bouillet, executive director of Agritel International.

The Black Sea region represents about 20 percent of global wheat exports, 40 percent of barley exports and 18 percent of corn exports, according to Rabobank.

The region is a key competitor for U.S. grain in the global marketplace due to its lower prices.

Political unrest continues to cast a shadow across the region. Russian President Vladimir Putin signed a treaty Tuesday to incorporate Crimea into its territory, prompting the U.S. to threaten more economic sanctions. Crimea voted to secede from Ukraine.

Winter wheat is 97 percent of wheat production in Ukraine, 49 percent in Russia and 2 percent in Kazakhstan.

Spring wheat planting has started in the region. Temperatures for the next 15 days will be good for seeding and germination, Bouillet said. But the area has a water deficit, with soil moisture reserves “quite low,” he said.

Large export companies say there hasn’t been an impact to Black Sea wheat exports, said Darin Newsom, senior analyst for DTN in Omaha, Neb., but uncertainty in the marketplace continues.

“The market seems to be taking a wait-and-see (approach),” Newsom said. “Right now we’re not seeing a huge move in the market tied to this, but markets don’t like uncertainty — that keeps them a little bit edgy.”

The Black Sea region hasn’t been as aggressive in the market as in the past, said Dan Steiner, grains merchant for Pendleton Grain Growers in Pendleton, Ore.

U.S. wheat prices increased when the situation first began, Steiner said, but dropped about 20 cents when it appeared that there was less risk. Soft white wheat is about $7.70 per bushel, according to Steiner’s company.

If poor weather arrives and political turmoil accelerates, Black Sea corn and wheat production may be reduced, which could increase demand for U.S. supplies, Newsom said.

“It could certainly provide some support,” he said.

Canadian competition could limit the amount of interest in U.S. wheat, but the situation in the Black Sea could boost U.S. corn exports, he said.

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