- According to the State Customs Service, as of January 12, since the beginning of 2021/22 MY, 34 million tons of grain and leguminous crops have been exported from Ukraine, which is 6.8 million tons more than on the same date last season. Supplies of wheat amounted to 16.2 million tons (+3.5 million tons), barley – 5.3 million tons (+1.4 million tons), rye – 146.8 thousand tons (+145.1 thousand tons), corn – 12.1 million tons (+1.8 million tons). In addition, 60.8 thousand tons of grain flour (including 59.8 thousand tons of wheat flour) were delivered abroad, which is 20.8 thousand tons less than the corresponding indicator of the previous season;
- According to the Ministry of Agriculture of the Russian Federation, from January 19, export duties on Russian wheat will decrease from the previous 98.2 to 95.5 $/ton (for the first time since September last year), on corn supplies – from 67.7 to 46.1 $/ton, for supply of barley – from 97 to 86.2 $/ton. The established fees will be valid until January 25, 2022;
- Australian Bureau of Statistics (ABS) reported that in November 2021, the country supplied 659.5 thousand tons of feed and malting barley to foreign markets, which is 53% more than a month earlier. Increased supply of barley from Australia is attributable to its competitive price, with global demand remaining strong with limited supply from other producing countries;
- CASDE analysts in the January report reduced the forecast for corn consumption in China in 2021/22 MY by 3 million tons compared to the previous estimate – up to 287.7 million tons, Reuters reported. At the same time, the consumption forecast was reduced both for feed purposes and for processing needs due to changes in the domestic market conditions;
- The State Grain Agency of Algeria OAIC purchased at an international tender on January 14 from 500 to 570 thousand tons of wheat from Romania, Bulgaria, Ukraine and Argentina. It is also assumed that some volumes may be supplied from Germany. At the same time, purchases of French wheat, which dominated the local market for many years, are not reported. Purchase prices amounted to 348-350 $/ton C&F, delivery time – from 1 to 15 and from 16 to 31 March 2022;
- The Iraqi Ministry of Commerce, in a tender held on January 14, contracted 150,000 tons of Australian wheat at a price of 447 $/ton C&F;
- The Iranian State Trading Corporation (GTC) bought about 240,000 tons of food wheat at a tender on January 12, probably from Russia and/or Germany, at a price of 360-364 euros ($412.96-417.54) per ton C&F;
- The Algerian state company OAIC will hold a tender on January 18 for the purchase of at least 50,000 tons of feed barley of arbitrary origin. Delivery is scheduled for February 16 – March 15;
- The State Food Procurement Agency of Turkey announced a tender on January 20 for the purchase of 345,000 tons of barley for delivery from February 15 to March 10, 2022.
Last week, two reports on the state of the global grain market came out one after the other. The first one – from US Department of Agriculture – had a total downward effect on world prices for wheat and corn. For example, for wheat, the USDA increased its production forecast for the 2021/22 season and at the same time lowered its estimate of consumption, which in turn led to an increase in the estimate of final reserves. For corn, production forecasts were also boosted by the US and Ukraine, offsetting expected crop losses from drought in Brazil and Argentina.
At the same time, the International Grains Council lowered its January forecast for total global grain production by 1 million tons, with IGC analysts partly offsetting the decline in corn production (mainly in South America) by increasing estimates for wheat harvests in Australia and Argentina. The spot market reacted accordingly to the new forecasts and estimates, although there were regional differences.
Last week, the market of major grain crops in Ukraine continued to strengthen, and at a faster rate than at the beginning of this year. And if the rise in price of corn was facilitated by a moderate increase in prices in the export direction, then domestic prices for wheat and barley grew solely due to the limited supply from producers and the acceleration of the devaluation of the hryvnia. The national currency during the week on the interbank market fell in price against the US dollar by almost 50 kopiykas, having overcome on Friday, January 14, the psychological mark of 28 UAH/$ (sale).
Therefore, according to the monitoring data of ProAgro Group, on the basis of primary elevators, during the second week of 2022, wheat prices increased for 2nd class grain by an average of 125 UAH/ton, 3rd class – by 150 UAH/ton, 4th – by 250 UAH/ton. At the same time, the rise in prices in ports amounted to 150 UAH/ton for all classes.
At FOB/Black Sea ports, the price of both milling and fodder wheat fell by 2 $/ton during the week, following the world market. At the same time, this drop could have been more significant, however, Black Sea wheat was supported by the expected limitation of exports in the second half of the season by Russia and a probable limitation by Ukraine.
Last week, corn rose significantly in price: at domestic elevators, prices for it increased by an average of 250 UAH/ton, while in ports – by 150 UAH/ton, FOB supply added a moderate 1 $/ton.
Barley last week, although it remained at the same price on EXW, in the ports also rose in price by 50 UAH/ton, despite the fact that its price was stable in the export direction.
z-17.01-eng
