There is still much to be done about the supply of relatively cheap grain from the Black Sea region. Ukrainian grain exports are booming. The Ukrainian Ministry of Agriculture warns that the country cannot keep up this pace. The Russian Ministry of Agriculture has kept its yield forecast for that country the same and is acting as if nothing is wrong. The governor of the Rostov region disagreed. He expects the harvest in this important region to be 30% lower than last season.
The December wheat contract on the Matif closed yesterday €3 higher at €223 per tonne. On the CBoT, December wheat closed 0,9% higher at $5.79¼ per bushel. Corn also showed a gain, closing 0,1% higher at $4.04¾ per bushel. Soybeans were in between the grains in terms of gain, gaining 0,3% to 10.00½ per bushel.
The supply of relatively cheap wheat from the Black Sea region continues to keep people busy. Yesterday, the Ukrainian Ministry of Agriculture released new export figures. Up to September 11, 8,2 million tons of grain were exported in the current season, compared to 5,4 million tons last season. The export figure for Ukraine this season includes 4,3 million tons of wheat, 2,5 million tons of corn and 1,2 million tons of barley.
Whether Ukraine can maintain this export pace is doubtful. Despite the war in the country and the drought this season, the expected wheat harvest in Ukraine is approximately the same as last season, at around 22 million tonnes. The big difference with last season, however, is that there was a relatively large stock of wheat due to problems with exports a year earlier. Total exports last season were partly due to this at 18,3 million tonnes. This season, Ukraine does not want to export more than 16,2 million tonnes of wheat. Prices for wheat from Ukraine will probably rise as a result, according to various sources.
Bad weather costs Russia tons of grain
Further east in Russia, things are also in turmoil. The Russian Ministry of Agriculture is keeping the forecast for the grain harvest at 132 million tonnes and exports at 60 million tonnes. There is more than enough wheat for domestic use, the ministry emphasises. Preventing price increases on the domestic market seems to be the government's main goal. The governor of the Rostov region does not fit in with that line. Vasily Golubev announced that 1 million hectares have been affected by bad weather. Due to frost relatively late in the spring followed by drought, the harvest in Rostov is expected to be 30% lower than last season. Last season, Rostov accounted for 11% of Russia's grain production. The governor has asked the Russian government to stop mandatory loan repayments for farmers until 2025.
Russian President Putin announced yesterday that he wants to explore the possibility of limiting the export of nickel, titanium and uranium. Wheat or other agricultural products were not mentioned during the video conference with the ministers. Putin did suggest that the export of other products could also be limited as long as Russian interests are not damaged. Some analysts are therefore not reassured that grain will escape the dance.
Advance on Wasde
Tonight Dutch time the USDA will publish the September edition of the Wasde report. Analysts expect a small reduction in the harvest forecast for corn and soy in the US. However, most interest is focused on what the USDA will do with the wheat harvest in the EU. France and Germany have reduced their harvest figures in the past period and players on the market more or less assume that the USDA will follow that line. After Russia, the EU is the largest wheat exporter on the world market.