Hot temperatures are threatening Black Sea corn crops as the weather turns dry from Bulgaria to Ukraine, the third-largest exporter.

Rainfall in parts of the region has been 10 percent to 30 percent of normal levels in the past month and temperatures 1 to 2 degrees Celsius (1.8 to 3.6 degrees Fahrenheit) higher, according to MDA Weather Services. That’s hurting corn at a key development phase, with crops already damaged in Romania and Bulgaria and some areas at risk in Ukraine, said Viktor Korobko, director general of broker Veles-Agro.

Traders are closely watching the weather in the Black Sea region before harvesting starts in about a month. Bulgaria’s crop will be at least 7 percent lower than previously forecast, according to exporter Vitagrain BG in the capital Sofia. Romanian production could also suffer from hot weather, said Olena Hesova, a grain market analyst at UkrAgroConsult.

In Bulgaria, “the potential of the crop is reduced and it will be much below the initial expectations,” Martin Roussev, chief executive officer at Vitagrain, said in a telephone interview Wednesday. “Parts of Romania are affected as well.”

Price Effect

A smaller harvest in the Black Sea region could help slow a slump in prices. They’ve sunk more than 60 percent since 2012, when the U.S., the top producer, faced its worst drought in more than 50 years. Futures on the Chicago Board of Trade, a global benchmark, are down 6.7 percent this year, set for a fourth annual decline in the longest slump in five decades.

Farmers in Bulgaria will probably gather less than 2.5 million metric tons of corn in the 2016-17 season, at least 200,000 tons below a previous estimate, according to Vitagrain’s Roussev. While Romanian production is still forecast to rise by 2 million tons to more than 10 million tons, the final estimate may still change due to drought and temperatures at least 5 degrees above normal in the past week, said Hesova at Kiev-based UkrAgroConsult. Growers in both countries will start gathering this year’s crop earlier than usual.

Rain hasn’t fallen for at least 25 days in parts of eastern Romania and soil moisture in the key-growing region in the southeast is below normal in “extensive areas,” Hesova said, citing data from the National Meteorological Administration of Romania. Temperatures that were more than 2 degrees Celsius above normal over the past month have contributed to evaporation of soil moisture.

Quite Risky

“The weather is quite risky but not as bad as last year, therefore output will be higher than last year,” Hesova said. The “southern part of Romania, which is the main corn growing area, may begin to suffer due to the drought,” while soil moisture in the western part of the country still looks good.

Ukraine’s corn areas also turned drier about a month ago and about half of the nation’s planted areas are experiencing “significant” shortfalls in soil moisture, according to David Streit, a forecaster at Commodity Weather Group. Areas in the southern part of Ukraine such Odessa, Nikolaev and Kherson are suffering the most, said Korobko of Veles-Agro in Odessa.

Russia has been somewhat spared as hot weather arrived after flowering took place, according to OOO ProZerno. Still, output will probably be 13.7 million tons, 1.4 percent lower than previously forecast, Vladimir Petrichenko, director general of the Moscow-based consultant, said by phone Wednesday.

Source: Bloomberg