Miller Magazine Issue: 145 January 2022

72 INTERVIEW MILLER / january 2022 ing, Jan/Feb tends to mark a seasonal top. Do you expect Russia to modify its floating tax sys- tem for grain exports? If FOB prices continue to go higher, yes I think they will. If prices go higher, Russia has to show an increas- ing tax as this remains a factor, albeit a small factor in efforts to cool domestic prices and help slow the flow of exports. It has already been communicated that if prices exceed $375, the tax multiplier jumps from 70% to 80%, and if prices exceed $400 then it jumps to 90%. Another factor to consider would be further efforts to stimulate logistics to get grain to the regions that need it, and as always unofficial restrictions (can take on many forms) if domestic prices rally further as well. KEY FACTORS TO WATCH IN 2022 What will be the key factors affecting the wheat prices in the coming months? I think the largest factor over the coming months will be spring weather and fresh speculative money flows. 2021 was all about stimulus, and now 2022 is all about managing the inflation created and now efforts to tame it- this will have a big influence on the USD, and thus an influence on wheat since wheat is highly sensitive to USD movement. 2021 found far from perfect growing conditions across the Northern Plains, Canadian prairies, Western and Northern EU, and parts of Central areas of the Black Sea- the repeating thought each springtime is will mother nature allow for a good crop. World export- ers' carryout/use remains with record tightness, so pro- duction levels will be watched in 2022. You have been following the grain market for many years. What kind of changes you have been experi- encing in the global grain trade? I think the biggest change has been the efficiency of information exchange and the volatility that this brings. I think the biggest factor behind this has been Twitter and the use of this for each trader. Algo trading also remains more present in today's trading, and this can bring added volatility as well as there still remains mistruths found in headlines/stories that a computer might read. As a result of these efficiencies and the ability of the market to know current events, the trading edge based on information has become ever smaller and the world has become much more global in nature. Efficiencies are good for the global markets, but we all must be in a position to adapt our processes and routines to these changes. What are the most important challenges grain trad- ers are facing today in their day-to-day business? I think as the market gets more efficient, business be- tween the farmer and end consumer has to show and prove their value even more. With more efficiencies, this allows the whole grain trade to squeeze margins and be more direct with the end consumer. As such, this pres- ents a challenge for the middle man and fully requires everyone to have in-depth KYC processes (Know your Counterparty). From a risk perspective, as the trade be- comes more global, grain traders have to have the abili- ty to monitor global fundamental, technical, political and outside market influences 24/7. Consumer awareness in health, origin, environment, climate change and animal welfare has been increas- ing. How these changing global consumption trends will affect the global grain trade flows? Fully agree with this statement. It seems the whole world is getting to be a bit more cognitive of climate change and their business's influ- ence on the subject. As a result of this, consumers might be more sen- sitive to their choice in what suppli- er to use based upon their carbon neutrality or efforts put in place to reduce the impact on the environ- ment. With all that said, I do think most consumers at the end of the day still remain price sensitive and it's their job to weigh price vs cli- mate initiatives. In a low price envi- ronment, I am sure this subject gains more attention, but right now it still seems a bit in fantasy land. This topic likely has many political loopholes to jump through before it's more of an industry norm.