Miller Magazine Issue: 151 July 2022

MARKET ANALYSIS 108 MILLER / JULY 2022 ruble exchange rate is artificial and completely controlled by the government. Talk about the fact that it is uncomfortable for export- ers has been going on for a long time. The risk is that at a certain moment when the ruble weakens, the duty can instantly increase significantly and make the deal unprofitable. In addition, the story of stolen grain sold from the occupied ports has reached a new level. If earlier grain was loaded in the Crimea with systems turned off, and the origin of this grain could be prov- en by circumstantial evidence, now the Russians themselves have said that they are shipping grain from recently occupied ports. But this bread smells bad, and Turkey, despite the position of the miti- gator, has taken the side of morality, logic, common sense and law. The outlook for Ukrainian exports remains bleak for now. Vol- umes in June were 44% lower than last year. A significant increase in June exports compared to April (March is not indicative) was pro- vided by logistics through the river ports of Reni and Izmail. More than 1MMT of grain and by products is 55% higher than market expectations at the beginning of the war. Unfortunately, the work of these ports depends on the Romanian pilots, and the traffic jam from boats does not decrease. With the start of active trading in the new Romanian crop, these volumes may decrease, at least in the first half of the new season. Tender activity is gaining momentum. But this season, the pur- chases of state operators began later than usual, and therefore they are carried out in large volumes In the absence of news, the market is in a downtrend. As the new crop approaches, a number of non-key players are already easing export restrictions. According to media reports, Germany's proposal to temporarily cut biofuel consumption in the G7 failed to gain support at the group's summit, with the US and Canada report- edly leading the opposition. A Reuters report on June 26, citing an unnamed source, said US and Canadian officials cited the spike in fossil fuel prices over the past few months as an argument why the G7 countries should refrain from imposing waivers on biofuel mandates. Reuters reported on June 23 that Germany and the UK will ask other G7 countries to consider lowering biofuel blending requirements to free up grains and vegetable oils amid fears of a global food crisis. As of June 21, China's wheat harvesting campaign is 99.2% com- plete, about 20 million hectares of wheat harvested, the average yield is 6-6.5 tons per hectare, so the production will be about 120- 130 million tons. Chinese experts expect this year's harvest to be the largest in 20 years. This raises suspicions, especially after infor- mation about the critically weak state of winter crops in the spring, as well as recent floods. Favorable weather conditions in Kazakhstan have supported the outlook for the country's grain production, while average yields should be above last year's results and the five-year average, MARS reported. Winter cereals showed an average level of devel- opment and growth, as sufficient soil moisture and moderate tem- peratures ensured sustainable development during most of the