Miller Magazine Issue 109 / January 2019

89 MARKET ANALYSIS MILLER / JANUARY 2019 reduction is replacement demand from sorghum to corn. That have made big influence on the trading geography. For example, EU has never been major importer, because there was a sufficient supply of corn. But this season after unfavorable weather hurt Spain’s crop, competitively pri- ced U.S. sorghum has helped meet Spanish needs. Spain is now the 4th-largest destination for U.S. sorghum with exports soaring to $26.4 million in the first 10 months of 2018. Also extremely high increase in demand is expec- ting from Mexico which needs 500 thnd mt instead 120 previous TY. As for Black Sea market, the main player is Ukraine. Nevertheless, harvested area fall to 40 thnd ha, yield has been increased from 1.9 to 3.9 mt/ha. Ukraine exports increase from 154 thnd mt in 14/15 to 121 thnd mt in 17/18. Main buyers were Spain, Italy and Israel. This season trade flow is slow as Ukraine loses EU mar- ket. Since the beginning of 18/19 TY, Ukraine export just 8.7 thnd mt of sorghum. Main buyer for today is Turkey which bought 5.2 thnd mt vs 8.6 at 17/18 TY. Also traditional demand is expecting from Israel at Feb- ruary-March. OATS Oat which is used mostly for animal feed and contains many starch, protein, vitamin and minerals is not used for bread making due to its swelling problem. Oat flour is mostly used for foods like porridge and flatbread; it seeds are generally used in grain mixtures having high nutritional value and biscuit production. Increased de- mand for food containing oats, and a decrease in world ending stocks of oats spur global trade in this crop. Af- ter a period of growth in the mid-10x, world oat tra- de began to decline again. In 2015 World imports and exports of oats were record highs. After the 2014/15 season, trade began to decline from 2 408 thnd MT to 2 140 thnd MT in 2018/19, despite the ever-growing production and consumption of oats for feed purposes in most countries. Canada and the United States account for more than half of world exports and imports of oats. These two countries have the most developed food pro- cessing industry of oats and traditionally high consumer demand for food made from this crop. There is a hedging mechanism in the US oat market using futures contracts traded on the Chicago Mercantile Exchange. In 2018/19 TG, Canadian exports will amount to 1 600 thnd MT, the United States Imports the same. Feed manufacturers prefer to use cheaper crops such as maize and barley ins- tead of oats. The demand for foods containing oats will continue to grow, offsetting a further decline in demand for feed oats. Statistics Canada (STC) today pegged the 2018 Canadian oat crop at 3 436 thnd MT, up 4% this month but down 8% compared to last year’s estimate of 3 733 thnd mt and 2% above the average. Feed use and exports will remain the major variable for the balance sheet moving forward. Canadian oat exports are already running 15% ahead of last year YTD (Aug-Oct). Cana- dian expect this pace will increase some moving forward as US horse demand is also up, offsetting lower US oat