Last week the US Department of Agriculture published October report, which turned out to be bullish for wheat and bearish for corn. In literal accordance with the new forecasts, the price dynamics for grain on world stocks unfolded, while on the spot some regional trading floors marched “out of step”.
- As of October 13, 2021, Ukraine harvested 52.1 million tons of grain from 11.6 million hectares at an average yield of 44.8 q/ha. In particular, 32.3 million tons of wheat, 9.6 million tons of barley and 576 thousand tons of peas were threshed. The harvest of buckwheat continues: 94.8 thousand tons were threshed, the average yield is 13.1 q/ha, 167 thousand tons of millet were gathered at an average yield of 23.3 q/ha. Also, 6.9 million tons of corn is threshed at the current yield of 57.5 q/ha;
- According to the State Customs Service, as of October 13, 15.945 million tons of grain and leguminous crops were exported from Ukraine from the beginning of 2021/22 marketing year, which is 2.7 million tons more than on the same date last season. Wheat supplies amounted to 10.202 million tons (+940 thousand tons), barley – 3.973 million tons (+912 thousand tons), rye – 51.5 million tons (+49.8 thousand tons), corn – 1.537 million tons (+679 thousand tons). Moreover, 38.8 thousand tons of grain flour was exported (including 38.4 thousand tons of wheat flour), which is 17.1 tons less than the corresponding figure of the previous season;
- According to the current data, as of October 11, 4.7 mln ha of winter crops were sown in Ukraine, which is 60% of the forecast. The main part of sown area consists of wheat – 4.2 million hectares (63% of forecast), winter barley – 389 thousand hectares (38%), winter rye – 120 thousand hectares (75%);
- Export tariffs for wheat from Russia will go up on October 20-26 to $61.3 per ton against $58.7 per ton a week before, as the Russian Ministry of Agriculture informed. Export duty on barley will be reduced from $49.4 to $45.9 per ton, duty on corn will go up from $47.2 to $48.4 per ton;
- The Australian Bureau of Statistics (ABS) estimates the country exported 2.18 million tons of wheat during August, which is 13% higher than the previous month (19.3 million tons), and 659,200 tons of barley, an increase of 16% (571,800 tons shipped in July). It is expected that demand for barley will continue to strengthen on the eve of the new crop entering the market, which will contribute to a further increase in grain exports from the country;
- Turkey’s TMO agency has purchased 310,000 tons of feed barley for delivery in October at an average price of $315.4/tonne C&F, which is $10.6/tonne higher than the purchase price at the previous tender on September 21;
- Turkey’s Grain Agency (TMO) has announced an international tender for October 21 for the purchase of 300,000 tons of milling wheat of unspecified origin, to be delivered December 10-31.
The last working week in Ukraine was short – only three working days, but despite that fact price dynamics in the domestic grain market was manifested in full measure, continuing the earlier trends to increase the cost of the entire range of major crops.
Thus, according to monitoring by “ProAgroGroup”, the demand prices of traders and exporters for food wheat rose again by 25-50 UAH/ ton on the basis of domestic grain elevators and up to 100 UAH/ton in the ports. The exception was forage wheat, which on the basis of EXW once again remained at the same price, further deepening its lagging behind the food classes.
Export wheat on the basis of FOB/Black Sea ports continued to rise in price during the week, but at a slower rate than at the beginning of the month: for the last 7 days it added only 1-2 $/ton, depending on the protein content. This moderate appreciation indicates that wheat – both Black Sea wheat in general and Ukrainian wheat in particular – approached its price maximum. Even the Egyptian GASC, which usually accepts a rise in prices, cancelled a tender for its purchase last week due to excessively high prices.
Corn also continued to rise in price during this period. On the basis of primary grain elevators it has again added 50 UAH/ton, but in the ports the price has increased by 150 UAH/ton. At the same time at FOB corn supply has even become a little bit cheaper. This may also be a sign that prices are approaching the upper limit, but the domestic grain market is still supported by extremely weak harvesting campaign and a lack of supply from the producers.
In addition, during the past week the prices for barley at the elevators increased by 25 UAH/ton on average, though in the ports the demand went up by 150 UAH/ton. A significant amount – almost 4 million tons – of grain has already left the country, so its supply in the domestic market is still limited. At the same time amid the recent Turkish tender the export price for Ukrainian barley rose during the week by an average of $10/ton FOB/Black Sea ports.
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