The supply of grain from the Black Sea region is not a certainty. This was confirmed once again on Sunday after a Russian attack on Ukraine. In the EU, the import of grain from Ukraine remains a thorn in the side of growers in the eastern member states. With the European elections approaching, Brussels is not insensitive to the demands of protesting farmers. New setbacks from Brazil are making little impression on the soy market.
The May wheat contract on the Matif closed yesterday €2,25 higher at €197,25 per tonne. On the CBoT, wheat showed a significant upward correction. The Chicago May wheat contract closed 2,7% higher at $5.42¾ per bushel. Corn moved mainly sideways, closing 0,2% lower at $4.36 per bushel. Soybeans fell 0,9% to $11.87¾ per bushel.
Russia's attacks on port facilities in Odessa last Sunday make it clear once again how fragile grain exports from Ukraine are. That is of course not news, but players in the grain market have been confronted with the facts. Ukraine has exported 32,4 million tons of grain so far this season, according to the Ukrainian Ministry of Agriculture. That is 9,4% less than last season. Wheat exports are 12,9% ahead of last season at 5 million tons. Ukraine further exported 1,9 million tons of barley, 16% less than last season, and 17,4 million tons of corn, 17% less. By far the largest part of exports flows via the Black Sea or the Danube. The area of spring wheat in Ukraine could reach 204.000 hectares this season, compared to 280.000 hectares last season.
Protests
The European Commission is in trouble with the protesting farmers. With elections approaching, Brussels appears willing to make concessions. The sharp edges of the Green Deal regarding agriculture have been largely removed. It remains to be seen how the Member States will translate these deleted requirements into national policy. To keep up the pressure, Polish farmers blocked two border crossings into Germany on Monday. Until now, the border blockades have mainly focused on the east at the border with Ukraine. Polish farmer interest groups have announced new actions for Wednesday.
In addition to the Green Deal, the import of cheap grain from Ukraine remains the other sore point for European farmers. The European Commission now seems to want to divert attention from this by introducing import restrictions on grains and oilseeds from Russia and Belarus. The Financial Times reports that Brussels wants to introduce a levy of €95 per tonne on grains from Russia and Belarus and a 50% import tax on oilseeds and derivatives from these countries. Russia and Belarus together account for more than 70% of the rapeseed meal that the EU imports. Russia is only a small player on the European grain market. With 290.000 tons of wheat, it accounts for just under 5% of European wheat imports, according to the latest figures from the European Commission. For comparison, the number 1 in this season is Ukraine with exports of 4,4 million tons of wheat to the EU and number 2, Canada exported 630.000 tons of wheat to the EU.
Brazil harvest forecast lowered again
Soy players do not seem to be affected by new reports from Brazil. According to Patria Agronegocios, 62,3% of the country's soy has been harvested compared to 62,9% last season. The lead in the harvest has therefore turned into a disadvantage. This does not come as a surprise due to the late sowing of part of the soy area. Safras & Mercado has once again slightly adjusted the harvest forecast for soy downwards. The total harvest is now estimated at 149,08 million tons. That is 0,3% less than the agency's February estimate. Last season, 157,83 million tons of soy were threshed in Brazil. The area cultivated with soy is 45,41 million hectares, according to Safras. Yields in Safras & Mercado's samples range from 3,29 to 3,55 tons per hectare.