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Update for March 10th 2023

Toxic Legacy & No Warm-Up in Sight

Market price movement is very sensitive to export demand. A week ago, rumors that China was back in the U.S. corn market rallied prices by almost $0.18 off the low earlier in the week. So, the decrease of -75-million-bushels in corn exports the USDA reported this week sent prices tumbling.

Exports from Brazil are almost entirely switched over to soybeans as this is harvest season, Ukraine export troubles have not changed, and Argentina’s corn crop will likely be down 20-30% from normal. So even though we are behind the anticipated USDA export pace there still are reasons to believe we could catch up. Five years ago, we had a similar export deficit, but the export pace increased and after several months were able to catch up with the USDA estimate set months earlier. So, with the U.S. being almost the only exporter of corn right now and our competitive prices it’s not unreasonable to think export numbers should improve.

Around the end of March most farmers go into a 90 day “selling hibernation” as attention shifts to planting and spraying. And the recent drop in prices will only add to farmers reluctance to sell. If export demand increases as expected U.S. grain buyers may need to rally prices to get the grain out of the farmers possession as many elevators are sold out.

Ukraine is frequently referred to as the “Breadbasket of Europe”. The nation has nearly 104 million acres of agriculture land and yearly more than 75% of the high-quality soil is put into production generating significant output. Making Ukraine one of the most highly cultivated country in the world and the 4th largest corn producing nation across the globe.

That is, until Russia invaded over 1 year ago.

The Russian invasion has left a devastating human toll and destroyed countless communities but is still unknown is if the war will leave a “Toxic Legacy” in the otherwise highly productive soil. Around 65% of the ag land in Ukraine is comprised of Chernozem a soil containing a high percentage of humus, phosphorus and ammonia compounds, a very fertile combination that also has exceptional moisture storing capacity. The Ukrainian government is concerned as to what may be happening to the soil and environment as a result of the ongoing war and has asked the United Nations Environmental Program (UNEP) to help access damages. The UNEP has found from studying other war-torn regions that physical soil pollution occurs from heavy machinery compacting the soil, explosives create craters and disrupt the temperature. The full impact cannot be fully known until the war has ended but early indications are that Ukraine may be left with a “toxic legacy” for generations.

Soil samples taken from the Kharkiv region, a region that has seen heavy fighting for months, shows high levels of toxins including mercury and arsenic. Armor-piercing shells and other ammunitions that eventually hit the ground often remain buried allowing contamination of the soil from depleted uranium can last for decades until it is finally dissolved into the soil.

The term bombturbation is used when referring to the impacts of war on the soil. Joseph Hupy a soil geomorphologist at Purdue University along with a colleague coined the term in 2006 while studying battlefield scars in Verdun, France left from WW1. According to Hupy, when an explosion occurs “bombturbation excavates a volume of soil from the site of impact, forming a crater and spreading much of the ejected soil out as a surrounding rim of mixed, but sometimes slightly sorted debris.” In Verdun, France they found just that and also discovered that in areas left with deep craters, the flow of water was completely altered. Studies of other battlefields from WW1 still show elevated levels of copper and lead more than 100 years later.

Some of the heaviest hit areas in Ukraine are located in the southern and eastern regions where most of the nation’s most fertile soils are also located. A database is being developed where the environmental impacts of the land can be documented. Yevhenia Zasiadko is the head of the group building the database. He said, “Harmful substances can migrate into the plants growing on that land, so food can become poison for those who consume it.” This level of contamination could take 200 years to remove through dozens of harvests and in some cases may never be able to grow crops safe for human consumption. (Soil Science, BBC, Science News, The Independent)

Another disturbance will move through the Midwest Saturday bringing a short-lived snowmaker. GFS and EURO model estimates are shown in the following maps.

Once this system exits the region the overall pattern calms down for much of next week. Temps are forecast to remain below normal for the next two weeks through March 24th.

Looking into April, hoping to find some signs of spring, there still aren’t any indications that the cold temps are ready to be more spring-like. The EURO Weeklies came out yesterday and show that for the next 32 days daily temperature departures will remain below normal for most of the nation. (First map) The second map shows the expected snowfall totals during that same 32-day period.

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