Miller Magazine Issue: 124 April 2020

84 ARTICLE MILLER / APRIL 2020 ring the same time last year. Such a jump was due to raise in purchases of durum wheat by Algeria and Tunisia. The latest one is in the anticipation of bad local crop 2020. Buyer’s protection In a bid to limit the influence of high prices and assu- re enough supply, after COVID-19 was confirmed as a pandemic, importing countries took measures to assure enough domestic supply. Morocco decided to halt import duties on soft wheat, durum and grains. Egypt eyed inc- reasing strategic staple reserves to from 3-4 months to 6 months. Brazilian mills were pushing to scrap wheat im- port tariffs amid pandemic. Meanwhile, Saudi Arabia was asking their private sector to import 355 KMT of wheat. According to Bloomberg, Lebanon’s government is con- sidering importing wheat for the first time since 2014 (about 80 KMT), weighing its dwindling supply of dollars against concerns that the coronavirus may threaten the nation’s food security. More efforts to follow… Until the end of May wheat market sounds to stay un- der the influence of the COVID-19, after which the we- ather factor should reclaim its authority. We are carrying on our tradition of giving pros and coins. Below is a range of factors, thus readers could themselves decide on which side of a price trend they are. Bull • The EU is expected by Strategie Grains to har- vest lower soft wheat crop 2020 of 136.7 MMT (-9 MMT y/y) as acreage was cut on autumn rains. • In spite of the fact that winter wheat acreage in the U.S. is the lowest over the past 111 years, total wheat acreage 2020 is forecast by the USDA at 44.655 mln ac- res, - 0.5 mln acres y/y (-0.2MLN HA). Thus, the harvest of American wheat in 2020/21 MY, according to the es- timates of individual analysts, could amount to about 50 MMT, -2.3 MMT against 52.3 MMT in 2019/20. • UGA forecasts Ukrainian wheat crop 2020 at 25.8 MMT vs 28.2 MMT LY (-2.4 MMT y/y). • FCStone noted in April 2020, about “the talk of co- ronavirus-related export restrictions especially in Russia”. • Logistical obstacles. • A labor shortage in India due to 21-day lockdown could disrupt harvesting of winter crops, incl. wheat. • Planting risks for spring wheat in Russia and the E.U. Bear • The second largest wheat crops in 2019/20 MY in Argentina and France • Continued shipment of a record Ukrainian crop 2019/20 • Russian crop 2020 is expected at 82 MMT (In- forma) - 84.4 MMT (SovEcon) (+7.5+9.9 MMT y/y), which is the 2nd highest ever, or even could become a new record after gathering 85.2 MMT in 2017/18 MY. • ABARES so far forecast 2020 wheat crop in Australia 21.3 MMT (+5.6 MMT y/y). • FCStone noted, the USDA rated the national winter wheat crop at 62% g/e in their initial spring U.S. report, +10% from the final fall figure and +2% y/y, above the 49% 5YA. • India is heading for a 4th consecutive record wheat harvest, with 2020/21 (Apr/Mar) production forecast at 105 MMT by FAS USDA.