Miller Magazine Issue 137 May 2021

104 MARKET ANALYSIS MILLER / may 2021 almost complete, but its area is only 2% of the total area under wheat. Winter crops in most regions are in satisfac- tory condition, and the production forecast is at the level of 26-29 MMT. Crop conditions in France have deteriorated over the past week, and now only 81% of wheat acreage is rated as “good/excellent”. The European Commission has lowered preliminary expectations for wheat production in the EU to 124.8 MMT, while the IGC still states another pro- duction record in the world for the next season. VEGOILS MARKET Markets are under pressure by low demand. CBOT soybean oil hit another record, palm oil has got higher. But the cash market almost flat.The low water level in the Parana River in Argentina is already a concern for Argentine exporters, and the annual dry season is just beginning. Not much rainfall is expected in the fore- cast for much of south-central Brazil, which is the watershed of the Parana River. As a result, the water level in the Parana River is expected to drop rapidly in the coming months. Offi- cials in Paraguay are already report- ing that soybean barges are stuck on the banks of the Paraguay River due to low water levels and the sit- uation is expected to worsen. When a similar situation happened last year on the Parana River, ships in the port of Rosario could not be loaded up to full capacity due to low water levels. At the time, the Argentinean govern- ment asked the governments of Bra- zil and Paraguay to increase the flow at the Itaipu dam in order to raise the water level in the Parana River, which they did. The situation is further com- plicated by the fact that the contract for the dredging of the canal on the Parana River was expired on April 30, and the Argentine Transport Minister died in a car accident a couple of weeks ago, according to Soybeans and Corn Advisor. According to market participants, April soybean exports from Brazil exceeded 17MM Т . Even it was lower, it’s a lot of beans. At least 6 vessels of Brazilian soybeans have already been contracted by the US, Brazilian traders and ana- lysts say. Soybean premiums in Brazil are falling again. Traders talk about requests for washouts on Chinese shipments for June and July from Brazil. A very poor crush margin may be the reason. Sunflower in Russia has been sown on an area of 0.8 million hectares, or 9.6% of the planned, and it is still dif- ficult to predict production. In Ukraine, 2.2 million hect- ares, or 35% of the planned area. The lag behind the traditional sowing schedule is significant, but this is not yet critical. The forecast for production still remains at 15.2-16.2MM Т . CBOT’s soybean-to-corn ratio fell to 2.35, suggesting an overvalued corn or undervalued soybean. A similar situation was observed in 2019 when the flood reduced the area under corn and encouraged farmers to sow it more intensively. As a result, someone calls all of these new supercy- cles, another one – Chinese edition of Great Grain Rob- bery. But the market knows better. May it May.