Головна Analytics Grain market reviews Grain and processed products market (13.12.21 – 17.12.21)

Grain and processed products market (13.12.21 – 17.12.21)

  • During the first decade of December, a moderate growing of winter crops was recorded in southern and central regions of Ukraine, in the rest of the country, active growth processes stopped. No threatening conditions for seedlings were observed;
  • According to the State Customs Service, as of December 17, since the beginning of 2021/22 MY, 29.2 million tons of grain and leguminous crops were exported from Ukraine, which is 5.3 million more than on the same date last season. Wheat supplies amounted to 15.3 million tons (+3.1 million tons), barley – 5.1 million tons (+1.4 million tons), rye – 86.5 thousand tons (+84.8 thousand tons), corn – 8.4 million tons (+0.9 million tons). In addition, 57.4 thousand tons of grain flour (including 56.6 thousand tons of wheat flour) were exported abroad, which is 16.8 thousand less than the corresponding figure for the previous season;
  • According to the Ministry of Agriculture of the Russian Federation, duties on export deliveries of Russian grain from December 22 will increase: on wheat – from the previous 91 to 94 $/ton, on barley – from 78.7 to 84.8 $/ton, on corn – from 54.4 up to 55 $/ton. The established duties will be valid until December 28 inclusive;
  • The Government Commission of the Russian Federation supported the proposal of the Ministry of Agriculture to establish a quota for grain exports from Russia from February 15 to June 30, 2022 in the amount of 11 million tons, including 8 million tons of wheat and 3 million tons of rye, barley and corn. Previously, the volume of the quota was proposed in the amount of 12 million tons;
  • The government of Argentina imposed restrictions on the export of corn and wheat in 2021/22 MY in the volume of 41.6 million tons and 12.5 million tons respectively in accordance with the aim of preventing shortages and suppressing the rise in food prices in the country;
  • The EU countries exported 13.7 million tons of wheat since the beginning of 2021/22 MY as of December 12, which is 1.2 million more than in the same period last season, while imports decreased by 0.6 million to 2 million tons. Exports of barley for the specified period amounted to 4.4 million tons, corn – to 2.6 million tons, and imports of these crops – to 410 thousand tons and 5.9 million tons, respectively;
  • Coceral experts have published the first harvest forecast for key crops in the EU and the UK in 2022. Total production is expected to reach 304.5 million tons, up from 307.6 million tons harvested in 2021;
  • The Algerian state agency for the purchase of grain at a tender on December 14 purchased 660 thousand tons of milling wheat for delivery in January-February at a price of 372-376 $/ton C&F. The main volumes will be supplied from Argentina and the Black Sea countries, and only a minor consignment will be delivered from France;
  • The Turkish Grain Agency (TMO) announced an international tender on December 21 for the purchase of 320 thousand tons of milling wheat of arbitrary origin with delivery on February 1-28, 2022.

Last week’s improvement in weather conditions in the United States, namely normalizing of rainfall, in key winter wheat growing areas, improved plantings in the country and lowered stock prices for US wheat. Meanwhile, in France, stock exchange quotations for wheat decreased both taking into account the overseas factor and due to the Algerian tender, where the French grain made up only a small share in the volume of purchases.

Downward trends prevailed in the wheat spot market as well. In particular, in the Black Sea region, prices fell under the influence of reduced demand, since grain from this region is the most expensive, and also given the practical cessation of purchases by Turkey due to the collapse of the local currency.

As for corn, prices for it were quite volatile. On the one hand, the main producing countries have reaped a good harvest and there is still enough supply. On the other hand, the market was supported by strong demand for corn from China.

Last week on the domestic wheat market the drop in prices accelerated, which was observed since the beginning of this month. Prices for corn fell once again. Barley also did not escape the downtrend this time.

According to the monitoring data of ProAgro Group, the average prices of both food and feed wheat at primary elevators and ports in mid-December decreased by an average of 250 UAH/ton, and this is the largest weekly price drop in the current season. The reduction in price was caused by a decrease in importers’ demand both due to the holidays and due to high prices, which at the end of November in the Black Sea region reached a maximum and were registered higher than for American and even European (in particular, French) grain.

Note that the main regional importer of wheat – Turkey has practically stopped purchases due to the record devaluation of its national currency, which has fallen in price against the dollar by half last week alone. However, the supply prices of Ukrainian wheat on the FOB/Black Sea ports basis remain quite high, and for feed wheat over the last week they even increased by an average of 3 $/ton. Amid the decrease in price of UAH, manufacturers have sharply reduced their supply, however, exporters do not yet need large volumes of purchases.

Domestic corn prices also fell last week: on EXW and CPT port bases, it lost an average of 100 UAH per ton. The reduction in price was due to a large corn supply from producers. On FOB/deep-sea ports, Ukrainian corn fell by an average of 2 $/ton over the past week.

Barley, although it kept its price at elevators, also fell in price in ports last week by an average of 100 UAH/ton.


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