Miller Magazine Issue 109 / January 2019

88 MARKET ANALYSIS MILLER / JANUARY 2019 many water came under the bridge, and for now there are no difference between Ukrainian and Russian quality. But for logistical reason Russian wheat mostly cheaper. Ukraine has big potential to grow as for increasing con- sumption. As for now Turkey millings converting 15.5 MMT of wheat, but could twice more. Corn market forecast isn’t so clear as a wheat. First of all it’s still incomprehensible would Ukraine able to export record crop or ending stocks will increase. Se- condly some U.S. farmers as for rainy weather had have narrow window for working the land for corn. Another black swan cold be oil prices and Trade War between China and the USA. Both questions center around politi- cs. Strong correlation between corn and oil explained as corn could be used for bioethanol production, which rise as oil go higher. Relationships between to world biggest economies have no direct influence on Turkey market, but it regulates world supply, demand, trade flow and geography of trading. Anyway huge Ukrainian crop de- mand is exceed supply so for the nearest future we can expect price rally. Main flavor for the last season is politics. As per axiform reasons tra- de with some Turkey kith is difficult or even prohibited as per sanctions, it’s regular practice to resell grains to those countries. This create additio- nal demand from Turkey also. These are what IGC analysts expe- ct for Turkey at new season: Soybeans: total consumption in 2018/19 TY expect up to 3.1 mmt, almost all is imported. 2017/18 TY imports was 2.8 mmt, which is more than total consumption Wheat: total consumption in 2018/19 TY expect up to 19.2 mmt little bit more then 2017/18 TY, im- ports near 5 mmt vs 6.2 previous se- ason Corn: total consumption 2018/19 is the same as last TY: 9.3 mmt, im- ports expect also at the same level. Trading between Ukraine and Tur- key developed rapidly. These are fi- gures that show volume of Ukrainian exports to Turkey Weakening of Ukraine currency make grains cheaper, but political cri- sis in Turkey weakened lyra as well, and for a short time lots of Turkish buyers lost their licenses. Now situ- ation is stable and trade flow grows. These are the expectation for global sorghum, oats and rye market for the new season: SORGHUM Sorghum is corn substitute. According to USDA data world sorghum production decrease by 11% to 58 914 thnd mt since 2014/15 TY. The latest report shows small growing on 137 thnd mt vs November numbers. The big- gest reduction by main producers since 2014/15 TY was in the USA: from 10 988 to 9 238 thnd mt, Sudan: from 6 281 to 4 000 thnd mt, Mexico: from 6 270 to 4 600 thnd mt. At the same time, all biggest producers are the main consumers. Mexico decrease consumption from 6 600 to 5 000 thnd mt, Sudan fall from 6 000 to 4250 thnd mt. Only U.S. increase domestic consumption from 2 459 to 6 604 thnd mt according to trade war with China. Anyway, U.S. still stay the main world exporters which will supply market with 3 000 thnd mt for 18/19 TY and China per contra could import 2 000 thnd mt in 18/19 TY that is less than 14/15 TY more than 5 times. The reason of such