Miller Magazine Issue: 141 September 2021

104 MARKET ANALYSIS MILLER / september 2021 mand for meat, the price of pork began to decline. From the New Year holidays to the present day, many farms operate at a loss, which is why they are looking for ways to reduce produc- tion costs. One of these methods was replacing the use of corn with wheat, rice, sorghum. This affected not only pig farms but also poultry farms. Ultimately, this led to the fact that demand fell to the lowest values in the last few years. In addition, due to the higher protein content of wheat than corn, many pig farms are reducing the use of soybean and rapeseed meal as an ad- ditional source of protein. Starch producers work, practically, only to cover the cost of production. As of August 19, out of 66 factories, only 54% were working. According to the August 26 export forecast, the USDA cur- rently predicts that US ethanol exports in fiscal 2022 will reach $ 2.4 billion, up $ 200 million from fiscal 2021 due to increased volumes and unit value. The agency said that expected higher corn prices would keep the unit cost of ethanol high. In fiscal 2022, the largest increase in US ethanol exports is expected to go to Brazil and the UK. The USDA said the expected sharp increase in sales to Brazil will be supported by recent drought and frost damage, which has resulted in lower sugarcane yields, higher sugar prices and an ongoing fuel demand recov- ery. The UK is increasing its fuel ethanol volume to E10 this fall, boosting overall demand, the agency added. India's ambition to reach E20 by 2025 continues to drive demand for industrial ethanol. Uncertainty remains about the future of fuel ethanol exports to China, according to the USDA. Good rainfall over the past 10 days in southern Brazil has increased soil moisture and improved maize sowing in Rio Grande do Sul, AgRural reported. By 26 August, 5% of the area had been planted in south-central Brazil. The first of the import- ant periods for assessing the potential of the future harvest is in October. M. Cordogne expects that the corn harvest in Bra- zil in 21/22 will be 116-118 MMT (+ 32-34 to 84 MMT in 20/21). USDA 118MMT versus 87, as planted areas will be increased by 1 million hectares, or 5%. 21/22 sown areas of soybeans will be increased by 4-5% to 40.5 million hectares, production of 143- 145 MMT according to M. Cordonier's estimate (+ 6-8 MMT y / y). USDA 144MMT. CONAB estimates the production of soybeans in the new season at 141.3MMT, corn - 115.9MMT, but these fig- ures can be estimated starting from October. As I told you before, 21/22 is the all-about-wheat year. The main importing countries of the Black Sea grain resumed pur- chases. The drought in the Middle East and Central Asia will provoke an increase in imports from Turkey, Iran, Syria, Uzbeki- stan, Pakistan and other buyers. The exchange market took into account all the negative news and further growth looks unlikely. Wheat prices in China remain quite high. Many traders sell their stocks out of fear of a decline in price. But a certain part of experts believe that wheat still has potential for growth. Since quality wheat this year will still be in short supply. So far, Asian countries have accounted for a large share of EU wheat ship- ments in 2021-22, as larger domestic feed wheat production has partially displaced the region from its traditional milling wheat buyers in North Africa this year. EU trade flows have been changed in the new marketing year as Algeria looked for alternatives to produce milling wheat amid growing concerns over crop quality in the EU, especially France, Algeria's largest wheat supplier. This year alone, up to 40% of the French wheat crop can be categorized as suitable for use as animal feed, as heavy rains in Western Europe this summer have negatively affected the quality of the crop in France. This, in turn, means that French exporters may have to target large buyers of animal feed in East and Southeast Asia to ease fears of oversupply of feed wheat in the EU, Argus re- ported. Wheat harvesting in Ukraine is 99% complete, while the aver- age yield remains at a record level of 4.62 MT/ha, and accord- ing to Minagro, production has already exceeded 32.5 MT. If we take into account that the State Statistics Committee, albeit with a lag, shows other data, then the total wheat production can reach 33 MMT, 60% of which will be of flour-grinding quali- ty. At the same time, about 76% of the area has been harvested in Russia, and the average yield is rapidly declining and cur-