Miller Magazine Issue 137 May 2021

103 MARKET ANALYSIS MILLER / may 2021 grain sorghum. Some farmers already started to washout contracts. According to the USDA, 10.67MMT of corn was used in the US for ethanol production in March, up 26% from February volumes, when production was hit by frost and snow and was 2% up last year level. The USDA currently expects 125.7MMT of corn to be used for ethanol pro- duction this marketing year. Typically, ethanol production accounts for up to 40% of US domestic consumption. Ethanol exports to China are above average, which to- gether with the increased shipping rates creates tension in the domestic market. In turn, due to a shortage of raw materials, Brazil reduced the requirements for the etha- nol content in fuel to 10%, and India switched to the use of rice until March 31. Planting rates in the United States have been accelerated significantly, reaching 46% of planned acreage, which is above the five-year average and well above last week's data. In Ukraine, only 20% or 1.07 million hectares are sown, but satisfactory weather conditions al- low market participants to state that the harvest may exceed 36MM Т US corn shipments in the week leading up to April 29 were above average market expectations, creating addi- tional support for prices. Despite this, there are about 18 weeks left until the end of the current marketing year in corn and 12.5MMT has not yet been shipped to China. This means that ex- ports should average about 672kMT per week from now to August. This is significantly higher than the recent rate of about 0.5MMT per week and is quite difficult from a logistics point of view, which raises concerns about possible defaults. And the spirit of contract cancellation is here. Around of May WASDE report, which will show new crops expectation, May contracts will reach expiration. Same days. Too much of uncertainty. Top risky. If I were a hedge fund I will cut position and fix some income. WHEAT Global wheat prices are bolstered by soaring corn prices, which have reached record highs as strong de- mand and supply concerns stemming from weather-related woes weigh on both sides of an already tense bal- ance, narrowing feed wheat to corn price ratios to unprecedented low levels. Farmers and traders in Romania believe that wheat production in the country will recover from a sharp drop caused by last year's drought. In the current season, production is estimated at 6.4 MMT, which is 38% less than last year. In 21/22, due to the expansion of areas, mild winters and a sufficient level of moisture reserves, it can reach 10 MMT, which, with an internal consump- tion of 2.5-3 MMT, will increase the supply of Black Sea grain, especially to the Middle East and North Africa. The National Institute of Meteorology said that moisture reserves in most regions of Romania at a depth of 1m should remain within satisfactory limits, close to optimal. Russia sowed 1 million hectares or 8% of the expected area under spring wheat, the situation with winter crops is still ambiguous. In Ukraine, the sowing of spring wheat is