Miller Magazine Issue: 135 March 2021

88 MARKET ANALYSIS MILLER / march 2021 the issue of grain reserves in the country has not been resolved. Analytical agency Сofeed reports that the demand for fodder corn will increase by 10MMT compared to last season, while the Chi- nese authorities have so far talked about imports within the framework of TQR in the amount of 10MMT. Most likely, the size of imports outside the quota will be from 17 to 23 MMT to build up stocks and increase pig production. At the same time, the market expects that the demand for Ukrainian corn will be about 4-5MMT. The decline in oil prices increased the pressure on corn quotes, falling on the background of low consumption of ethanol in the United States. In Ja- nuary, the use of corn for ethanol in the United States decreased by 3.7% compared to December to 10.56 million tons, which is 11.4% less than in January 2020. Due to frosts in February, operators expect data for the past month will be even more pessimistic. Export sales of corn from the USA fell by 50% over the week to 453kMT. Argentine corn on FOB basis is now offered $ 10 cheaper than American corn and $ 30 cheaper than Ukrainian corn. At the same time, the market expe- cts the effect of reducing the VAT rate in Ukraine, which will entail adjustments in export prices. At the same time, the absence of a strong domestic market in Ukraine will prevent farmers from sel- ling corn to processors within the country in the long term. Rains in Brazil are delaying the sowing of second-crop maize, so some of the acreage may be planted after optimal timing, reducing yield po- tential. According to Ag Rural, 39% of the planned acreage is now planted, up from 67% on average in 5 years. Argentine agency Pablo Adreani & As- sociates predicts Argentina's corn crop could reach 51MMT, higher than USDA and Argentine Exchan- ge forecasts. According to the European Commission, the im- port of corn to the EU for the week decreased to the lowest in 2020/21 MY of 139.4 thousand tons, and in total in the season amounted to 10.6 MMT, which is 28% less than the corresponding figure last year. WASDE predicts a decrease in corn im- ports to the EU to 15.5 MMT, while today Ukra- inian corn in the procurement structure is giving way to Brazilian corn. Market operators expect the EU to buy another 3MMT of Ukrainian corn, which raises doubts in view of the optimistic attitude of Brazilian producers. At the same time, corn quotes on the Matif strengthened. WHEAT Crops in the United States have deteriorated. European Commission and IGC revised EU produ- ction and stocks. Despite upbeat official data on wheat production in India, local analysts point to potential problems with weather conditions. Whe- at harvest may be below expectations by 3-4%. Pakistan has tendered an additional 300kMT of wheat. The results of the tender have not yet been announced, but according to Reuters, the minimum bid price was $ 332. Crops in Texas, Kansas and Oklahoma have deteriorated, according to USDA, with estimates not including the impact of recent frosts. SovEcon raised its forecast for Russian whe- at exports to 39.1MMT due to limited supply from competing countries in the Black Sea region. The Manager of National Commodity Reserves of Chi- na said that 1,681MMT of wheat were sold at an auction today from state reserves. The volume sold amounted to 41.7% of the volume offered on the market. China sells wheat to replace more expensi- ve and scarce corn. Most wheat and barley crops remain in good con- dition, according to FranceAgriMer. An estimated 87% of soft wheat crops in France were in good or excellent condition by the end of last week. Crops in Ukraine are also assessed as satisfactory so far, as in most of the territories of Russia. The fear is cau- sed by the southern regions of the Russian Federa- tion and the eastern and southeastern territories of Ukraine, where there is a lack of moisture. So far, Ukrainian vice minister of Economy expects wheat production 21/22 up to 30MMT – almost 20% hi- gher YoY as favorable weather conditions and inc- reased in planting areas on winter wheat which is 6,7 mln ha. But I’m doubt. VEGOILS MARKET Vegetable oil markets are weakening under pres- sure from falling oil prices, increased supply of palm and soybean oil and weak demand from Chi- na. Palm oil production in Malaysia is recovering and exports are below expectations, pushing prices down. A similar situation is observed in Indonesia. Soybean harvesting rates in Brazil are below ave- rage. According to the Agrural agency, only 25% China domestic corn prices Jan 20-Mar1 by China Oilseeds TC