Miller Magazine Issue: 151 July 2022

MARKET ANALYSIS 109 MILLER / JULY 2022 growing season, especially in the south and west of the country. According to the latest BAGE report, Argentina's wheat area forecast was cut by 100,000 ha due to dry weather and is now expected at 6.3 million ha. The planted area jumped 14.5 percent- age points in the week to June 22, to 61.9% of expected area, but remains nine percentage points below last year's pace. According to BAGE, the lack of surface moisture in much of the central and northern parts of the country's agricultural land limits the advance- ment of crop areas. By the end of this year, meat processors won 200,000 tons of beef from duty-free imports to the Russian Federation, but this had a negative impact on the business of Russian farmers. They can- not compete on price with suppliers of raw materials from abroad, which are at least 25% cheaper and have practically stopped selling livestock for slaughter. Farmers are not ready to cut pric- es due to increased costs, including for feed. In the foreseeable future, market participants warn, the current situation may force many farms to abandon the cultivation of cattle, which will lead to an increase in the dependence of the domestic market on meat imports. This will affect the growth of feedstocks, and as a result, an increase in export potential. A similar situation with stocks and in China. After the rapid in- crease in the number of pigs, the market began to refuse expen- sive meat, and the number began to decline again. In the ware- houses of processors, stocks with a high cost are stored, and therefore, until "expensive" feeds are sold at a price acceptable to processors, a significant reduction, even with a fall in prices for meal, is not worth waiting for. In the case of China, this will reduce the import of a number of products and will also put pressure on prices. A study by Brazilian consultancy Céleres predicts that China's corn imports will rise to 60 MMT per year in a decade. This is be- cause China's yields are lower than those of the world's major corn producers, and also because China has removed corn from the list of foods the country needs to be self-sufficient in. This change was previously applied to soybeans, resulting in a sharp increase in imports to China. Whether this forecast is being realized is now difficult to judge. High prices are treated with high prices. The reduction in wheat production in key regions, the war and the blocking of Ukraine's ports by Russia are already included in the market's expectations. In the absence of news, we will begin to gradually decline, al- though there is no need to talk about a return to the usual price ranges. The world still needs to make up for the damage caused by Russia's lockdown and military aggression.