Miller Magazine Issue: 131 November 2020

86 MARKET ANALYSIS MILLER / November 2020 simplified by Egypt and Algeria, and Turkey dropped duties. This also indirectly speaks of the existing inte- rest in wheat, especially low-protein. According to SP Global Platts, the spread between Russian wheat with 12.5% protein and Ukrainian whe- at with 11.5% protein on a FOB basis of deep-sea ports is at the minimum level. Market participants note that with feed wheat, which is in short supply, the spread is also minimal. SUPPLY Australian wheat is heading towards March pri- ce levels. Crop prospects remain very optimistic and are valued by the market at 28-30MMT. According to Singaporean traders, all offers of new crop Aust- ralian wheat have already been fully contracted, with shipment in December, when harvest starts. According to various sources, from 1.5 to 2.5 MMT have been contracted, of which 1 MMT - to Asian countries, primarily to China. China has been buying Aust- ralian wheat in the past few months at a price of $ 235-240 / t C&F, although by mid-November the price had climbed to about $ 265 / t C&F. Nevertheless, it is competitive compa- red to Russian whe- at of similar quality, which was offered at that time at a pri- ce of $ 270 / t C&F. Recall that China thre- atened to "look" more closely at Australian wheat, and Australia, in turn, signed a tra- de agreement with Indonesia in May, including preferential terms for the supply of 0.5 MMT of grain. The latter was an im- portant sales market for Ukraine and Rus- sia, but if the supply is still limited, then Australia can return this market to itself. Due to the revalu- ation of the poten- tial wheat produc- tion in Argentina to 16.8MMT, local analysts expect that exports will be limited to 10.2MMT. In the graph from the BCR report, projected exports are highlighted in red, confirmed sa- les - 3.8MMT in green, and 5MMT export purchases in yellow. At the same time, the unofficial rate of the Ar- gentine peso to the dollar in the second half of October has already exceeded 193, while the official remains at 77.8 pesos per dollar. Local experts estimate FOB De- cember shipments at $ 260, including an export duty of 12%. Minus handling costs and duties, the local wheat price for the farmer would then be $ 228 per tonne. In the event that exporters do not fulfill their supply obligations, wheat will be sold on the domestic market, where consumption is at the level of 6.5 MMT per year. Sowing in Ukraine, despite the rains, still lags behind previous years. According to a preliminary survey of farmers, the Ministry is building a balance of the futu-