Miller Magazine Issue: 134 February 2021

77 MARKET ANALYSIS MILLER / february 2021 Trade sources from Singapore have linked South Korea's interest in the recent intro- duction of cheaper Argentine corn. US corn is the most competitive price in North Asia from October to November, according to Platts' Maize Arbitrage Price Matrix. Argentina's corn export season starts in March-April, which puts it in the category of the competition with other countries. WHEAT Russia has agreed on the procedure for calculating the export duty for the new se- ason, which has raised many questions in the domestic market. In the current envi- ronment, it becomes dangerous to take short po- sitions in view of the fact that the amount of the duty at the time of the transaction will not be clear. Here are just some of the questions the market has about this duty. 1. What contracts will be included in the bench- mark: with what period of shipment? Or just spot? After all, it is natural that for short positions, the further from the date of shipment, the higher the risk that the price will change significantly by the time the contract is executed. 2. Will port breakdown be taken into account: small/deep? There is a natural spread between ports and this must be taken into account. 3. Protein premium? Customs statistics do not take into account different qualities, and there is a spread between different classes of wheat. 4. Corn and barley are not the "strongest" posi- tions, they are rarely lo- aded from Novorossiysk, and many of these deals are tenders, the price of which for the exporter is higher than the market price due to additional costs. 5. If the parties decided to take into account the past discounts/premiums (under previous contracts) in the contract, this already distorts the price, but these are the obligations of pri- vate companies and they go outside the market. Wheat stocks of major exporters are low The General Administration of Customs of China has recently published "List of Countries / Regions Authorized to Export Grain and Plant-Based Feed to China." At present, the import of wheat from Australia, Canada, Kazakhstan, Hungary, Serbia, Mongolia, Russia, France, Great Britain, the USA, Lithuania is allowed. 1.7 MMT of wheat from the state reserve was sold this week or about 43% of the proposed volume. Key points in the report are increases in domestic consumption in Argentina, Canada and China, whi- ch will reduce global supplies. Australia exported 2.5MMT of wheat in December, which is 173% hi- gher than in December 2019. 800kMT was shipped to China. USDA infographics.