Головна Analytics Grain market reviews Grain and processed products market (31.01.22 – 04.02.22)

Grain and processed products market (31.01.22 – 04.02.22)

  • In Ukraine, a January observation of seedlings of winter crops showed that the plants have a green color with slight damage to the leaf apparatus. In most of the territory, the general condition of crops, according to the National Agrarian Academy of Sciences of Ukraine, was characterized mainly as good and satisfactory;
  • According to the State Customs Service, as of February 4, 39.1 million tons of grain and leguminous crops have been exported from Ukraine since the beginning of MY 2021/22, which is 9.8 million tons more than on the same date last season. Supplies of wheat amounted to 17.2 million tons (+4.1 million tons), barley – 5.5 million tons (+1.5 million tons), rye – 156.8 thousand tons (+155.1 thousand tons), corn – 16 million tons (+4.2 million tons). In addition, 63.9 thousand tons of grain flour (including 62.8 thousand tons of wheat flour) were delivered abroad, which is 23.9 thousand tons less than the corresponding indicator of the previous season;
  • Ukraine and Turkey signed an agreement on a free trade zone, the key position of which for Ukraine is the establishment of a duty-free regime for 10,337 commodity items. In particular, Turkey will open improved access for agricultural products: the duty on supply of grain will be 0%;
  • According to the Ministry of Agriculture of the Russian Federation, from February 9, duties on export deliveries of Russian wheat will decrease from the previous $93.9 to $93.2/ton, on barley – from $74.6 to $73.3/ton. At the same time, the export duty on corn supplies will increase from 49.6 to $52.7/ton. The duties will be in effect till February 15;
  • The area under wheat in Russia this year will reach 29.5 million hectares, which is 0.8 million hectares more than in 2021. Areas under corn will increase by 34 thousand hectares, up to 3 million hectares, under barley will remain at the level of last year – 8.2 million hectares, under rye – will decrease by 126.8 thousand hectares, to 917.6 thousand hectares;
  • The USDA agricultural attache in Turkey has reduced its forecast for wheat imports to the country in 2021/22 MY by 5 million compared to the previously released figure – to 10.8 million tons, which is also lower than the January USDA forecast (11 million tons), due to a decrease of the exchange rate of the lira, as well as the expected increase in barley imports, Reuters reports;
  • The Tunisian State Agency for Food Procurement, during a tender held on February 2, purchased, as planned, 75 thousand tons of durum wheat at a price of 643-649 $/ton C&F, 100 thousand tons of soft wheat at a price of 348.69-350.77 $/ton C&F and 75 thousand tons of barley at a price of $332.69-342/ton C&F. Delivery of grain to the importer should be carried out in February-April;
  • The Grain Agency of Turkey (TMO) announced on February 8 an international tender for the purchase of 13 batches of 25 thousand tons, a total of 325 thousand tons of feed corn of arbitrary origin. The supply is scheduled for February 25-March 15;
  • The State Food Procurement Agency of Bangladesh announced a tender on February 14 for the purchase of 50 thousand tons of milling wheat of random origin with supply within 40 days from the date of the contract.

According to the updated FAO forecast, world cereal production in 2021 will amount to 2.793 billion tons, which is 0.8% more than a year earlier. Wheat production in 2021 will be comparable to 2020, with coarse grain production 1.3% and rice 0.7% higher than a year earlier.

Global cereal consumption is expected to increase by 1.6% in 2021/22 compared to the previous season, which could lead to a decrease in the stock-to-use ratio to 28.7%, slightly higher than a year earlier, but still comparable to previous periods.

The FAO forecast for the volume of grain trade in 2021/22 MY amounted to a record 481 million tons, which is 0.4% higher than in the previous year. Thus, the volume of world trade in wheat could increase by 2%, and rice – by almost 4%, more than offsetting the expected decline of 1.5% in trade in coarse grains.

According to monitoring data by ProAgro Group, prices for wheat of all classes on the basis of primary elevators during the week decreased by an average of 350 UAH/ton, while in ports the decline was even more rapid and amounted to 400-450 UAH/ton. This happened amid a sharp drop in the export price of grain to a three-month low: wheat with a protein content of 12.5% ​​with deliveries in February-March to FOB/Black Sea ports fell in price by an average of $16/ton to $310-315/ton last week, and feed has lost about $10/ton in price.

At the same time, wheat prices fell throughout the Black Sea region, which was caused by several factors: a decrease in demand from importers, who mostly bought the necessary volumes of grain for the near future, a decrease in fears of a Russian attack on Ukraine, as well as a good condition of winter crops in the region.

Last week, corn also fell in price at domestic elevators and in portl by an average of 50 UAH/ton, while the nearest FOB contracts lost about 1 $/ton. The price reduction could have been more tangible, but prices are being supported by the growing global trend in soybeans.

Last week, barley on EXW fell in price by an average of 50 UAH/ton, but in the ports it retained the preliminary price, while in the export direction contracts rose by an average of 5 $/ton. However, due to a reduction in domestic supply, trade is rapidly curtailing. On average, food and feed wheat fell by 200 UAH/ton last week on the basis of processors. At the same time, prices for corn and barley remained at the same level. Producers’ bid prices for wheat processing products – premium and first grade flour and bran – were also stable.


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