Grain and processed products market (04.10.21 – 08.10.21)

Last week, global grain markets – wheat and corn – stopped moving in a single price trend and diverged depending on the conditions of specific regional trading platforms.

• According to the Ministry of Agrarian Policy, as of October 7, 2021, 49.4 million tons of grains were harvested in Ukraine from 11.2 million hectares with the average yield of 44.1 c/ha. In particular, 32.3 million tons of wheat, 9.6 million tons of barley and 576 thousand tons of peas were threshed. It was also threshed 86.4 thousand tons of buckwheat with the average yield of 13.2 c/ha, and 160.2 thousand tons of millet with the average yield of 23.2 c/ha. Besides, 4.17 million tons of corn were threshed from 14.4% of the harvested area, while the average yield was 53 tons/ha;
• According to operational data, as of October 4, 3.5 million hectares of winter crops were planted in Ukraine, which is 44% of the forecast. The main part of sown area consists of wheat – 3.1 million hectares (45.9% of forecast), winter barley – 252.2 thousand hectares (24.7%), winter rye – 105.7 thousand hectares (65,8%);
• According to the Ukrainian Grain Association, a record harvest of wheat in 2021/22 MY at the amount of 33.1 million tons will allow to export 26 million tons of grain without any threat to the food security of the country;
• The duty on wheat exports from Russia will increase to 58.7 $/ton from October 13 to 19 against 57.8 $/ton a week earlier, the Russian Agriculture Ministry said. Export duty on barley will go up from 43.1 to 49.4 $/ton, corn duty will go up from 45.2 to 47.2 $/ton;
• According to FranceAgriMer, heavy rains in France have hampered the pace of corn harvesting. As of October 4, the grain was threshed by only 7% of the planned area (+5% for the week), while a year earlier the figure reached 47%;
• Export sales of U.S. wheat in the last week of September totaled 333,2 thousand tons, the U.S. Department of Agriculture said, down 19% from the average of the previous four weeks. Wheat sales reached 11.4 million tons in the three months since the beginning of the season, down 21% from the same period last season. Weekly corn sales rose to 1.3 million tons;
• Pakistan Trading Corporation announced a tender for imports of 90 thousand tons of wheat. Under the terms of the tender, grain shipments are due in January 2022. The tender is scheduled to close on October 13.
• On the eve of release of October report of USDA, which is to be published tomorrow, October 12, December futures on wheat and corn at Chicago Board of Trade declined by the end of the week. Prices for both grains also declined on the US spot market. Although, experts expect further reduction of wheat remains for the end of the season and the volume of American grain export. At the same time, in Europe, and specifically in the Black Sea region, prices both for wheat and corn increased, including due to reduction of forecasts of Russian wheat export by the Ministry of Agriculture, as well as delay of corn harvesting on the continent.
• Last week, domestic prices for main grain crops in Ukraine continued to grow in line with both export prices and other factors not only in the grain market, but also in related markets.

Thus, according to monitoring by “ProAgro Group”, the demand prices of traders and exporters for food wheat have risen by an average of 50 UAH/ton on the basis of elevators and up to 100 UAH/ton in ports. At the same time feed grain on EXW remained at the same price, although on the basis of CPT-port not so essential, but also rose in price – on the average by 25 UAH/ton. As for export, wheat on FOB/Black Sea ports during the week increased in price by $6/ton, on average, regardless of the protein content. High prices for Ukrainian grain did not allow it to win the last Egyptian tender, where Romanian and Russian wheat were cheaper. However, supply prices continue to rise, partly because of the increase in the cost of sowing, in particular the rise in prices for fertilizers.

Last week, barley prices at grain elevators and ports also rose by an average of 50 hryvnias per ton. At the same time, domestic processors have increased purchase prices for barley, as well as for food wheat and corn, by 100 UAH/ton. Feed wheat went up least of all – by 50 UAH/ton – on processors’ bases.

But last week there were no changes in prices for processed wheat products – flour and bran, which went up in late September. Therefore, now the processors allowed consumers to adapt to the new price level.