Miller Magazine Issue: 138 June 2021

67 COVER STORY MILLER / june 2021 tination was mostly covered by Russian and Ukrainian wheat in 2020/21. Thus, a heavy surplus of grain could search for its new home in 2021/22. Price decrease during harvesting: to be or not to be Last year many importers highly awaited for tradi- tional price decrease during harvesting. But it was not as obvious as previously. At that time, prices were supported with a later start of harvesting and wheat stocking via major importers due to COVID. This year also some support for prices could come due to lat- er start of harvesting, although so far pressure is no- ticed due to forecast of higher wheat crops in major producing countries. At the same time, some quality inspection companies are already starting talking that in case of long period of June rains, which are current- ly forecast for Ukraine, not only decrease of quality parameters, but also grain lodging is possible, which could lead to yield losses during the harvesting cam- paign. Thus, the downward corrections of Ukrainian wheat crop are not excluded in June-July. As of 28 May 2021, the price of the new crop wheat for August delivery reached $255/MT FOB Novoros- siysk for 12.5% protein and $242/ MT FOB Berdyansk for 11.5% protein. It showed decrease by $20/ MT compared to the prices as of 09 May 2021, but it is still $53-55 above the prices of the new crop wheat same time last year. Also, it is very important to note, that for the first time since 2015/16 MY, since end of March 2021 Ukrainian corn prices appeared higher than wheat. It gives more chances for wheat in the feed industry. Factors to watch: • Development of weather in the US: rains in May pressured prices, Kansas crop tour found yields above-aver- age, further development to be watched; • Wheat crop development in the BS; more rains are forecast for June; fungal diseases could take place; delay of harvesting start could lend some support to prices; in case of long rainy periods lodging of grain is possible, which could lead to yield losses during harvesting; • Rains came to Europe after April dryness, improving winter cereals yield prospects; • Rally in corn prices could switch more demand to wheat; it is important, how low would be the final crop figure in Brazil, facing worst dry spell in 91 years; • SovEcon noted, “Russian floating wheat tax kicks in on 02 Jun 2021. The first week it will be $28/MT”. SovE- con expects a substantial rise in wheat exports in June thanks to a lower tax rate. Till 02 June 2021, the rate is fixed at 50 Eur/MT ($61). This is bearish wheat in a short-term. • Chinese feed demand for wheat, Chinese stocks; • Official and unofficial export regulations in the Black Sea and other exporting regions • Demand from major importers