Miller Magazine Issue: 139 July 2021

105 MARKET ANALYSIS MILLER / july 2021 to six vessels for August loading, and in recent weeks another 200-250kMT have been sold to Chinese buy- ers off the east coast of Australia for September-October shipment. Chinese feed manufacturers have increased the proportion of wheat in their compound feed since 2020, following the government's recommendations to reduce dependence on expensive corn and soybean meal by diversifying towards cheaper alternative feed, thereby stimulating demand for wheat imports. According to local experts, wheat production in Mol- dova can reach 1.2-1.3 MMT, which is two times higher than last year. Due to the lack of sufficient capacity, a significant part of the harvest, which has already started, will enter the market in the coming weeks. The official forecasts of wheat production in Bulgaria at 5.8 MMT, the average harvest for the country. Romania expects 10 to 12MMT and is actively trading wheat. Production in Ukraine, where harvesting is lagging be- hind due to weather conditions, is expected to be record high - above 29MMT. Russia, as of 07/06/21, harvested almost 700 thousand hectares of wheat, also with a sig- nificant lag from last year's rates. Threshed 2.2MMT ver- sus 8.39MMT on the same date last year, the average yield is slightly lower, which is explained by the lag in the pace of harvesting. SOYBEANS Uncertainty in the oil market is holding back oilseed prices. Potentially good soybean and sunflower har- vests also contribute to bearish sentiment. According to official data, about 4 million hectares of soybeans have been planted in the Chinese province of Hei- longjiang, but in fact, soybean acreage is about 3.4 million hectares, which is 1 million hectares less than last year, according to China Oilseeds. Taking into account the weather factor, namely the relatively low temperatures and high rainfall, a significant decrease in the production of non-GMO soybeans is projected. The State Reserve continues to purchase soybeans of the 2020 harvest. There is practically no demand in the physical market. Many large buyers of non-GMO soybean oil have accu- mulated large product leftovers, approximately 80-150 thousand tons of oil from each of the companies. Sales volumes of finished products are 15% -20% lower than in the same periods over the past 5 years. Manufacturers of soy products cannot find buyers for soybean oil, so they are forced to cut production of their products. If such a low demand from end buyers remains, then China can enter the market with the purchase of soybean oil no earlier than December this year.