Головна Analytics Grain and processed products market (03.01.22 – 07.01.22)

Grain and processed products market (03.01.22 – 07.01.22)

  • In the last decade of December 2021, difficult weather conditions prevailed in Ukraine, associated with a sharp cooling and subsequent significant temperature fluctuations. On the coldest days, the average daily temperature was 5-10°C below normal. At the same time, by the end of the decade, snow cover of various heights was established throughout the country. At the same time, winter crops were in a state of winter dormancy;
  • According to the State Customs Service, as of January 6, 33.2 million tons of grain and leguminous crops were exported from Ukraine from the beginning of 2021/22 MY, which is 6.8 million tons more than on the same date last season. Wheat supplies amounted to 16.1 million tons (+3.6 million tons), barley – 5.2 million tons (+1.4 million tons), rye – 121.5 thousand tons (+119.8 thousand tons), corn – 11.3 million tons (+1.8 million tons). In addition, 59.6 thousand tons of flour of grain crops were exported abroad, which is 19.7 thousand tons less than in the previous season;
  • According to USDA monitoring data, the state of winter wheat crops in the United States has deteriorated over the past month amid the lack of sufficient rainfall in the main production regions. In particular, in the state of Kansas, the share of grain crops in good and excellent condition decreased from 62% as of November 28, 2021 to 33% by January 3, 2022;
  • A severe drought that has hit most of Argentina since mid-December threatens the corn crop, which entered the active phase of development. According to Reuters, the Buenos Aires Grain Exchange predicts the country’s gross corn harvest at 57 million tons;
  • In 2021, the Egyptian GASC purchased 5.14 million tons of wheat at 21 tenders, including 2.22 million tons (43% of the total) Romanian, 1.43 million tons (28%) Russian, 1.19 million tons (23%) Ukrainian and another 300 thousand tons (6%) French. Purchase prices at tenders fluctuated in the range of 231.88-353.5 $/ton FOB;
  • Turkey has extended zero import duty on wheat (including durum), barley, corn, oats, rye, chickpeas, lentils and sorghum until the end of 2022. Zero duties on these crops were established in September and were to be valid until December 31, 2021 in order to stabilize the price situation in the domestic market;
  • According to market operators, Jordan, during a January 5 tender, purchased 60 thousand tons of wheat of the 2022 crop of arbitrary origin at a price of $326 per ton C&F with deliveries in the first half of August this year;
  • The Tunisian state agency for the purchase of food ODC, during a tender held on January 5, contracted 125 thousand tons of soft wheat, 75 thousand tons of durum wheat and 75 thousand tons of barley. Grain supplies to the importer should take place in January-March this year.

The average value of the FAO Food Price Index for cereals in 2021 was 131.2 points, which is 28 points (+ 27.2%) higher than the previous year and is the highest average annual indicator since 2012. Average prices for corn and wheat last year were 44.1% and 31.3% higher than average prices in 2020, respectively, which was mainly due to strong demand and limited supply, especially from the main exporters of wheat.

During the first week of 2022, wheat and corn prices continued to rise on major exchange markets, responding to worsening weather conditions in production regions of the United States and Argentina. At the same time, on the spot, as usual, the dynamics of grain prices was multidirectional.

If the last week of last year the price situation on the domestic market of the main grain crops remained stable, then after the end of the New Year celebrations, from the second half of last week, despite the low activity of both buyers and sellers, prices for wheat and corn went up under the influence of foreign trade factors. Ukrainian barley began to fall in price along with falling prices in Europe.

According to the monitoring data of ProAgro Group, on the basis of primary elevators, wheat prices in the first week of 2022 in some regions increased to 200 UAH/ton, but the average value on the EXW basis for milling wheat increased by only 50 UAH/ton, for stern – 100 UAH/ton. At the same time, the rise in prices in ports amounted to 100 UAH/ton for all classes. On FOB/Black Sea ports, since the second half of last week, the price of wheat with 12.5% ​​protein increased moderately – by an average of 1 $/ton, while feed wheat, on the contrary, lost 2 $/ton in price.

As for corn, prices for it during the past week at domestic elevators increased by an average of 100 UAH/ton, while in ports – by 250 UAH/ton, which is explained by logistical problems with delivery to sea export bases. At the same time, the supply of corn on FOB added 3 $/ton. Export prices are supported by drought in Argentina, which worsens the prospects for the future harvest of South American corn, the supply of which will dominate the world market in the second half of the corn season.

Last week, barley fell sharply in price at elevators – by an average of 200 UAH/ton, which is due to the lack of supply of large-scale consignments and a decrease in demand. However, in the ports the prices remained unchanged even despite the cheapening of barley in the export direction since the end of last year by an average of 6 $/ton. Wheat and corn last week also went up on the basis of domestic processors – by 50 and 250 UAH/ton, respectively, while the selling prices for wheat processed products – flour and bran remained unchanged.

z-10.01-eng