Miller Magazine Issue: 148 April 2022

MARKET ANALYSIS MILLER / APRIL 2022 109 for all kinds of grains and by-products per year. Even if we build terminals on the European borders, this logistics chan- nel will need time to turn on and rise to 10-12MMT per year. If we talk about demand, we have to keep in mind that new wheat crop planting in North Africa and the Middle East will start in April and they are suffering from dryness while wheat is a base of people's daily diet. These Arab coun- tries consume the highest wheat per capita, about 128 kg of wheat per capita, which is twice the world average. More than half of this comes from Russia and Ukraine. Govern- ments have already started to seek money for state wheat reserves. We expect at least 4MMT of wheat deficit in these regions. Current prices on the physical market are historically high and in case the war does not stop in the nearest future, they will continue to rise. Uncertainty put additional wood to the inflation fire and some counties already started to limit ex- ports of food to increase stocks in case of breaking of the supply chain. KEY BUYERS – DATA FROM KSE Egypt: Over 32% of the population are living beyond the boundary of poverty, lack of food and hunger is a major prob- lem for Egypt. Yemen: Indicators of malnutrition among women and chil- dren are left with the most in the world, 1.2 million young women who are young, and 2.3 million children under five years of age suffer from malnutrition. Indonesia: 14.3% of the population live outside the borders of vigilance, and 19.4 million are not in full possession of food. Bangladesh: 40 million people know of a power outage, and 11 million suffer severely from hunger. Ethiopia: 5.9 million suffer severely from hunger. Lebanon: 22% of Lebanese families know interruptions in their household. Libya: 83% live on less than $1.25 per day, 699,000 people experience power outages. Pakistan: 20.5% of the population are malnourished, 44% of children younger than 5 years old are in education. Iraq: 2.4 million additional expenses will be required for the foundation. While the world is trying to calculate potential Black Sea corn areas and yields, according to consulting firm AgRu- ral, 94% of Brazil's second corn crop has been sown, up 20 percentage points from the same time last year. The central states of Mato Grosso, Goiás and Minas Gerais account for about 60% of safrinha maize production and plantings in these states were completed earlier this month. The crop was sown under conditions with an excellent soil moisture profile in most regions, ideal for early plant growth. In fact, ac- cording to WeatherTrends360, the states of Goiás and Minas Gerais could be the fourth or fifth driest March in over 30 years. Dryer-than-usual trends are expected to continue in much of the same areas of east-central Brazil into early April. Rainfall will be close to or slightly above normal for the state of Mato Grosso, the main producer of safrinha, where soil moisture remains in good condition. Southern Brazil, where the growing season for soybeans and early corn was very dry, saw some rainfall in March 2022 and could be the third or fourth wettest March since 1992 or earlier for Rio Grande do Sul. More than 150 municipalities in the North, Midwest and Northeast have been warned of the potential for heavy rainfall of 50 to 100 millimeters per day and strong winds of 60 to 100 kilometers per hour starting Monday. According to the National Institute of Meteorology's Inmet alert system, these heavy rains, accompanied by gusts of wind, carry the risk of power outages, falling tree branches, flooding and electrical discharges. CONAB lowered its first corn yield estimate to 24.3MMT a few weeks ago. But his forecast for a critical second crop was raised to 86.2 MMT. According to Safras & Mercado, farmers in many regions responded to high price signals and almost certainly planted more second-crop corn than originally planned. As a result, the company hopes to in- crease safrinha corn production to possibly more than 83MMT and forecast a record total corn crop of 115.7MMT. Agroconsult published a much higher second crop forecast of 92.2MMT. In terms of exports, Safras & Mercado has so far received 34.5MMT, up 66% from last year. CONAB is 35MMT compared to 36.68MMT in January, but this fore- cast was made public before the invasion of Ukraine. Ston- eX is far more optimistic about Brazil's increased role in the corn trade this year, posting an export estimate of 40MMT, nearly double what it was last year. USDA is still at 43MMT. Spain temporarily relaxed import rules for Brazilian and Argentinean corn two weeks ago after supply disruptions arose following the Russian invasion of Ukraine. Rumor has it that Spain will buy 400kMT of Brazilian second crop corn. Do not think that Russia attacked only Ukraine. And stolen tractors are only a small part of the problem. Ukraine will not sow part of the area and the world will not receive part of the grain. The second problem is the lack of seeds and chemicals in Russia. In addition to a dirty reputation and difficulties with banks, production in Russia may also be below expectations. And the government's policy of curbing food riots by subsidiz- ing bread and duties makes production less profitable. Thus, we switched from the question of "how much we did not buy this season" to the problem of "how much new grain should be subtracted from our assumptions", how to live with it and where to get the money for this.