Miller Magazine Issue 146 February 2022

95 MARKET ANALYSIS MILLER / FEBRUARY 2022 tion's diet. Global food security is a major concern if Ukraine's exports are disrupted and it will be diffi- cult to replace them with wheat of a different, more expensive origin - some countries simply don't have the money to do so. Argentina and Australia, larger than expected, are already offering wheat in mar- kets they weren't familiar with, but not everywhere – sometimes they are too far or too expensive. Same time French wheat needs to be more price-competitive to win new export markets as Algeria changed the terms of its tenders to allow Black Sea grain amid a diplomatic row with Paris. At the same time, deliveries to Morocco increased. The European Commission on January 27 revised its forecast for soft wheat stocks in the European Union upward due to a sharp increase in imports. The Commission forecasts soft wheat inventories to reach 13.3 MMT at the end of the 2021-22 marketing year, a four-year high and up from a December fore- cast of 12.9 MMT. As of January 27, crops in most re- gions of production were in a satisfactory condition. In the Black Sea region, the temperature exceeded the norm. China, the world's largest wheat producer for many years, is forecast to harvest 137MMT in the 2021-22 marketing year, according to FAS. How- ever, while production has been relatively stable in recent years, consumption jumped to a record 150MMT last year, up 24MMT from the previous high in 2019-2020. Only a slight decrease is forecast for this year, as consumption is projected at 148.5 MMT. China announced earlier this year that it will be al- most self-sufficient in staple grains like wheat and rice by 2025. Today, on the paper market and exchanges, wheat clearly looks more overbought compared to corn and soybeans, and traders do not give up hope for a weakening of the escalation of the conflict by Rus- sia, so stock quotes are in a downtrend. Activity in the physical market is traditional for the current peri- od of the season, and many importers have taken a wait-and-see approach in anticipation of the data on the state of winter crops and plans for spring sowing in order to start trading the new crop more actively. VEGOILS MARKET From the oil market, we have two headaches, ex- cept for oil: the palm oil market and the threat of crop failure in South America. And the icing on the cake