Головна Analytics Grain market reviews Grain and processed products market (06.12.21 – 10.12.21)

Grain and processed products market (06.12.21 – 10.12.21)

At the end of last week, another December report of the US Department of Agriculture was released, in which the forecast for global wheat production in 2021/22 MY was raised by 2.61 million to 777.89 million tons. The forecast for world wheat trade was also increased by 2.3 million tons, in particular the estimate of Ukrainian exports was raised by 200 thousand to 24.2 million tons.

Once again, the forecast for world corn production was raised – this time by 4.1 million to 1.209 billion tons. For Ukraine, American analysts increased the estimate of production by 2 million to 40 million tons, and the export forecast – by 1.5 million to 32.5 million tons. Overall, the forecast for world corn exports was raised by 1.39 million to 204.86 million tons.

  • According to the Ministry of Agrarian Policy, as of December 9, in Ukraine corn was harvested from 97.8% of the projected area. 40.01 million tons were threshed with an average yield of 74.7 c/ha;
  • According to the State Customs Service, as of December 10, 28.18 million tons of grain and leguminous crops were exported from Ukraine since the beginning of 2021/22 MY, which is 5.3 million tons more than on the same date last season. Wheat supplies amounted to 15.067 million tons (+2.926 million tons), barley – 5.039 million tons (+1.333 million tons), rye – 86.2 thousand tons (+84.5 thousand tons), corn – 7.763 million tons (+1646 thousand tons). In addition, 55.5 thousand tons of grain flour (including 54.7 thousand tons of wheat) were exported abroad, which is 15.7 thousand tons less than the corresponding figure for the previous season;
  • According to the Ministry of Agriculture of the Russian Federation, duties on export supplies of Russian grain will rise again from December 15: on wheat – from 84.9 to 91 $/ton, on barley – from 75.1 to 78.7 $/ton, on corn – from 54.3 to 54.4 $/ton. The updated duties will be in effect until December 21 inclusive;
  • According to the European Commission, as of December 5, EU countries exported 12.8 million tons of wheat, which is 11% higher than the corresponding figure for the previous year;
  • As of December 8, Argentina’s wheat was harvested from 3.43 million hectares, according to the Buenos Aires Grain Exchange. This is 53.4% ​​of the total cultivated area under this crop in the country (+8.5% per week). 10.1 million tons of grain (average yield 29.5 c/ha) were threshed;
  • Conab analysts raised their forecast for corn production in Brazil in 2021/22 MY by 0.5 million – to 117.2 million tons, which is 34.6% more than the harvest in the previous season. Grain exports are expected to reach 36.68 million tons compared to 19.2 million tons shipped in 2020/21 MY. The harvesting of wheat has been completed in the country – the harvest is estimated at 7.8 million tons, which is a record figure for Brazil;
  • According to the Australian Bureau of Statistics, in October this year the country exported 432.1 thousand tons of barley and 297.6 thousand tons of sorghum against 512.6 thousand tons and 225.1 thousand tons in September, respectively;
  • The gross harvest of cereals and legumes in China in 2021 amounted to 682.85 million tons, an increase of 2% compared to the previous year. This was reported by the State Statistical Office of the PRC. In particular, the corn harvest in the country increased by 4.6% to 272.6 million tons;
  • The state agency of Saudi Arabia for the purchase of food SAGO, during a tender held on December 3, contracted 689 thousand tons of wheat to be supplied in July 2022 at an average price of 365.14 $/ton C&F.

Last week, prices for wheat and corn continued to decline on the domestic market for major crops, although the price of barley rose again, but this time partially.

According to the monitoring data of ProAgro Group, the purchase prices of both food and feed wheat at primary elevators decreased by an average of 150 UAH/ton, and slightly more in ports – by 200 UAH/ton. The decrease in prices was supported by the general weakening of the world wheat market, although export prices for food grains with 12.5% ​​protein content in the export direction remained constant compared to the beginning of the month, and for wheat 11.5% they even increased by 1 $/ton.

However, feed wheat at FOB/Black Sea ports lost 7 $/ton over the week. The main factor behind the decline in domestic prices was the fact that the majority of exporters completed purchases of wheat under the current contracts and are preparing for a long break in work associated with the upcoming New Year holidays.

Domestic corn prices also fell last week: on EXW and CPT port bases, it lost an average of UAH 100 per ton. The reduction in price instigated by a large supply of corn from producers, who have already harvested more than 40 million tons. For this reason, Ukrainian corn fell in price by 3 $/ton at FOB/deep-water ports, although American and French grain, on the contrary, rose in price during this time.

As a result of a reduction in producers’ reserves and a shortage of supply of consignments within the country, barley has once again risen in price. Although this time only on the basis of linear elevators, where the price for it increased by an average of 100 UAH/ton. At the port elevators, prices remained constant, while on FOB basis they dropped by 10 $/ton during the week.

Domestic processors also cut prices for wheat and corn last week, but rather moderately – by 50 UAH/ton. Barley prices remained unchanged. The price situation on the domestic market for wheat processing products – wheat flour and bran – also remained stable.

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