Miller Magazine Issue: 154 October 2022

MARKET ANALYSIS 94 MILLER / OCTOBER 2022 lead to lower shipping in the last week of September. As of September 27, 231 vessels with 5,3MMT of food including the biggest capsize grain vessel Marant Excellence -115kMT. have passed via the grain corridor. Presents of Ukrainian grains and by-products don’t allow prices to rise sharply. Only 30% of wheat directed to EU countries, rest 70% of Ukrainian wheat which shipped via the corridor sold to Africa, the Middle East and Asia countries to prevent famine. The wheat complex, after surged on the Black Sea conflict’s escalations, pulled back, posting more than 3% drops into the weekend. News of Russia’s bumper crop had pushed markets lower early in the week. Market awaiting a decision about terms of grain corridor prolongation. The IGC raised its forecast for 2022/23 global wheat produc- tion, mainly reflecting an upward revision for the crop in Rus- sia. It pegged global wheat production at 792Mt in 2022/23, up from a previous projection of 778 million and now above the prior season’s 782Mt. Russia is now expected to produce 93.4Mt, up from a previous forecast of 87.6Mt. Russia’s wheat exports in the 2022/23 season were still seen at 36.5 MMT, despite the higher production forecast, leading to an expected build-up in stocks in the country. Stocks of wheat in Russia at the end of the 2022/23 season were projected at 22.5 MMT, almost double the prior season’s level of 11.3 MMT. Sovecon raised its forecast for Russia’s 2022 wheat crop to 100MMT from 94.7 due to high yields of spring wheat. Russian wheat exports are picking up after it has regained its competitive edge. Should see 1+mmt this week for the first time in many months. September volume is however estimated at 4.3 MMT, not bad, but still below the average 4.6 MMT. In this context, as of September 28, the export duty on wheat will decrease to 2,476.6 from 2,668.3 rubles per ton a week earlier. MARS expected the Russian crop at 95MMT. According to the sources, in fact, the total military mobiliza- tion of the agrarian sector of Russia will already feel a signifi- cant shortage of labor in the form of drivers, agronomists and agricultural machinery operators by spring. Market rumoring about serious lack of storage capacities in Russia due to re- duced export pace and solid stocks of last year. Some analysts say wheat ending stocks 22/23 could be up to 20 MMT. It caus- es massive loses for farmers. From Ukraine, Ukraine’s 2023 wheat crop may decrease from 16MMT to 18MMT, down from 19.5MMT this year due to an expected fall in the winter wheat sowing area. Lack of finance can lead to lower input usage which remains to poor yields and quality. Ukrainian officials have said the area under winter wheat could fall by at least 20% due to the Russian occupation of some areas of the country as farmers prefer to sow oilseeds that have stable export demand. Source: IGC