Miller Magazine Issue 110 / February 2019

90 MARKET ANALYSIS MILLER / FEBRUARY 2019 crop will more than offset reductions in Brazil. China’s agriculture ministry said a new African swine fever outbreak was confirmed in the Hunan province. The outbreak was on a farm with 4,600 live pigs in the city of Yongzhou, infecting 270 of the animals and kil- ling 171, the Ministry of Agriculture and Rural Affairs said. That is another signal from China for reducing consumption. World wheat production in February increased due to the WASDE report, mainly due to an increase in yield in Russia. World trade increased slightly due to increased imports to Iraq and Turkey. Exports increased for Russia, Pakistan and Turkey, but reduced for Australia. But over the next few weeks, Russian exports will slow down due to high prices. We saw the market reaction to the previ- ous GASC. After that, domestic wheat prices practically ceased to grow. But GASC purchased 300,000 tons of wheat for shipment from March 21 to March 31 from the USA, France and Ukraine. The Egyptian Ministry of Supply has strategic wheat reserves for more than five months. Russian ports reduced unloading by 6% in Feb- ruary. Also, the market is interested in a future meeting of Iran, Russia and Kazakhstan under an agreement on trade in wheat. Another issue that is being discussed be- hind the scenes is that the Russian Minister of Agriculture announced that he would meet with grain exporters on 02/11/2019 to discuss the prospects for their exports for the remainder of the marketing year. The WASDE report shows an increase in wheat produ- ction in the United States. Winter crops of wheat are the lowest since 1909, even this did not make it possible to support the market. This was mainly due to cuts in feed and residual quantities, with quarterly stocks being upda- ted, showing large stocks of wheat. Ending stocks in the world fell by 0.57 MMT compared to December figures. The Russian Institute for Agrarian Market Research (IKAR) predicts wheat harvest in Russia in 2018-1919 at 76.5 MMT, compared with 72.0 MMT in 2017-18. At the same time, SovEcon expected 80 MMT. We will wait and see who is up.