Miller Magazine Issue: 144 December 2021

96 MARKET ANALYSIS MILLER / december 2021 sure to drive prices down. But the opposite has hap- pened, as dry conditions in the Black Sea region made planting difficult, prompting local producers to tighten control over newly harvested grain. The winter cropping areas of Ukraine, Russia and Kazakhstan were very arid and of growing concern. Delaying sowing increases the risk of poor establishment of crops and difficulty getting through the winter. Farmers around the world have become more in- formed and discerning sellers. They have government support and money to build grain elevators. They can keep the crop for a long time. We call this "sitting on the harvest." This negates the harvest pressure we are accustomed to. And the main consumers were waiting for the pressure of the harvest. Imports were lower than usual at this time of year and the unexpected rally caught buyers off guard. And everyone came to the market to meet their immediate needs. Russia has clearly demonstrated the idea of restoring stocks in the new season. Potential exports are lower than proportionally would have been expected for a har- vest of 82 million metric tons. The Ministry of Agriculture said that grain exports will not be subject to quotas from July to December this year, but quotas are possible from January to June next year to contain the rise in prices on the domestic market. At the end of October, world wheat prices continued to rise - there was demand and sowing was in difficult conditions - this meant the possibility of a decrease in production next year, as sowing conditions in some ex- porting countries of the northern hemisphere were not optimal. China continued to import grain at a record pace, expanding its origins as much as possible to re- plenish stocks and re- build the pig herd. And while everyone seemed to be ready to come to terms, a drought reared its head in Brazil. The corn crop was melting like ice cream in the sun. A new round of rising corn prices and Chinese pigs pushed wheat up. And Russia, preparing for the elections, has strengthened non-mar- ket regulation - it an- nounced that in addition to quotas, they will use duties. First - a fixed amount, and then - they remembered that once there was an experi- ence of a floating rate. This incorrect calculation formula completely confused everyone, and the only thing that became clear was that it is dangerous to take risks and go short. In early spring, the global wheat balance is getting tighter every day, the health of winter crops in the north- ern hemisphere has become critical to assessing world supply in the new season - everyone worried about how crops weathered the cold winter. Everything began to accelerate, and events were ahead of the news. The container ship that got stuck in the Suez Canal finally showed us how weak we are. We can conquer space and print hearts in 3D, but one big boat has jeopardized all world trade. And all this against the background of the fact that people are tired of quar- antine. And Russia also raised an old conflict with the United States and accused their ministry of manipulating forecasts. Everybody watched the detective series “So how much wheat will be in Russia next season”. And they sailed on a wave of floating duty. We came to the end of the season with a widespread of forecasts in Russia, when local analysts reduced their readings almost every day, trying to guess the figure, and the authorities per- sistently insisted that there would be a big harvest, in spite of the American ministry. And in the United States, there were not the most optimistic moods. To top it all - with rains in Ukraine and the EU - this reduced the quality of the supply. And the demand has not gone anywhere. Season 21/22 was called the supercycle. It was not only grain and oil that rose in price. All commodities sup-