Miller Magazine Issue: 150 June 2022

MARKET ANALYSIS 97 MILLER / JUNE 2022 market, a negative scenario may play out in the rice market. China will provide a loan to the government of Pakistan. In addition, there are rumors that there will also be a deal to buy fertilizers and wheat. They strongly support information about the biggest stocks on Chinese silos and – who know – maybe Beijing will show how influen- tial they are. According to the Ministry of Agriculture and Rural Affairs of China, on May 29, the wheat harvest in the country is in full swing. 37.98MMT of winter wheat harvested in the country, the wheat crop in Sichuan province is coming to an end, in Hubei province has already exceeded 80%. Both CBOT and Euronext will react on it while the physical market shows strong levels. GASC booked the first vessels for the new on- going season Year ago on April 6, 2021, they started marketing year’s tenders buying FOB 10 dollars lower MATIF (CIF equivalent 9 dollars over MATIF), but this time they were waiting for the end of domestic harvesting and booked FOB 40 dollars over, CIF 72 dollars over. These are the result of the war, expensive logistics and poor crops expecta- tions which is more clear than April’s compared to the common harvest- ing schedule. Egypt has bought 2.7 MMT of local new crop wheat into reserves as of May 23, with the intention of buying more than 5 MMT during 22/23. The tender season for Turkey and countries of the MENA region is open officially. US new crop export commitment at 3.4 MMT, while unshipped old crop sales at 900kmt at the low end of the recent 6-year range for this date at 4.5-6.6 MMT. The Southern Plains weather pattern, as well as the EU, turned more favorable, but it remains to be seen if the moisture is too late. Agrimer dropped France wheat ratings to 67% good/exc from 69%. Improved moisture is in the forecast so it’s already priced. Wheat is on a big break from the mid-May highs which happened to coincide with India's export ban, and now the country has no plans to curb food exports for now, a minister said, weeks after New Del- hi banned private wheat exports. The government's decision to ban wheat exports and restrict sugar exports had raised doubts about some curbs on overseas sales of rice as well. This is a clue to India’s wheat problems. Global buyers, as per LaSalle Group, still don’t have much July forward coverage and peak shipping for the Black Sea both from farmers and exporters. According to Turkish experts, under favorable weather conditions n 22/23, Turkey can harvest 16.5-17.5 MMT of wheat, including 3-3.5 MMT of durum wheat against 15.5 MMT a year earlier (2.5 durum). Despite the increase in wheat yields in Turkey, the country could potentially lose part of the flour market to Russia. The export duty on wheat has made processing within Russia more profitable. The quality does not yet correspond to the Turkish one, but individual flour mills in Russia are already negotiating with the Turks regarding the use of Turkish trade- marks. Brazil is expected to increase wheat production by 3-11% this year, ac- cording to Embrapa Trigo. Record prices, growing demand and “favour- able climate expectations underpin the forecast for acreage increase” from 2.7 million hectares in 2021 to just over 3 million hectares in 2022. But the country of 213 million people can no longer meet domestic de- mand, which is estimated at 12.7 MMT per year and continues to grow. Domestic logistics costs have forced many farmers to opt for exports, which has increased the need for imports. Wheat sowing in the Brazil- ian state of Paraná reached 53% in the week ending May 23, up from 58% year-on-year, according to Deral. Parana expected to harvest 3.8 MMT of wheat, +20% yoy, from 1.1 million hectares, -5%. As more uncertainty on the market, as interesting trader’s job is. When you see again food prices skyrocketing after doubled prices or even empty shelves, please make sure you understand who did this to you. Nobody knows if Russia and Ukraine will be able to supply their