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  • Bulgaria

The Ministry of Agriculture continues to report significant progress in the sowing of spring crops in Bulgaria. In their latest report for the period up to June 1, oilseed sunflower sowing progressed by 17 kha, bringing the area for the season to 821 kha, against 848 kha a year ago. Year-on-year backlog shrinks to 3%.
By 13 kha more, compared to the previous week, the areas sown with corn for grain reached 465 kha, against 510 kha a year ago. The lag, if it can be called such on June 1, compared to last year is 7%.
Regarding the statistics, we note that the areas to be harvested with autumn crops remain unchanged. Accordingly, wheat is with 1192 kha, barley with 117.5 kha and rapeseed with nearly 94 kha.

  • Europe

MATIF funds remain massively short in the wheat market, but since the beginning of May we have increasingly had short covering weeks. The last one, which is for the period until last Friday, is not like that, as in it we have a new shortening by 4k to 71.6k net short contracts. Whether it is because of what is happening in Ukraine or because today we are expecting the June USDA report, but grain markets rose sharply yesterday. After a year of continuous decline, the potential for a more substantial positive correction is certainly there. It remains to be seen if and when it will happen and how deep it will turn out to be.
There was minimal shorting by funds last week in the corn market, where net shorting increased by 0.3k to 4.4k contracts. Rains that have already started in France and have not stopped for weeks in central and southern Europe are a good reason for the continued negativity. With exports from Ukraine increasingly lacking, Southeast Asian corn importers are meeting their needs mainly from South America, where, despite crop problems in Argentina, there is apparently no shortage of cheap (Brazilian) offers.
The most persistent in their negativity, however, are the funds on the rapeseed market, on which since the end of last year, the net shorts have been in the range of 30-40k. The last week, however, marked a kind of record, because after a new 1.3k short, the net short increased to 41k contracts. With wildfires unabated, the canola market in Canada supports an increase in MATIF, which does not change the generally negative picture in both markets. Palm oil remains weak, crude is almost flat from last month and other vegetable oils such as Rotterdam sunflower continue to try to stabilize.

  • America

Expectations for today’s report are not high, in the sense that the changes in it are unlikely to impress one way or the other. Production in South America is now almost clear, and it is still too early for big changes in the Northern Hemisphere. After beaver rains, wheat planting in Argentina advanced rapidly by 13% for the week, ending at 19.5%, against a 30% average over the past 5 years. Export sales from the US are not impressive, but at least they are positive for both new and old vintage. With expectations of up to 600 km, a total of 240 km are accounted for both, of which 235 km are new.
After the cancellation of purchases from Mexico, corn sales are totally disappointing, with expectations of up to 1,000 kmt, only 66 kmt were reported, of which 173 kmt old and cancellation of 107 kmt new crop. Harvest in Argentina remains slow, with 33% complete as of June 7, compared to 44% on average over the past 5 years. From 2.27 Mha, 10.8 Mmt were harvested with an average yield of 475 kg/dk. The condition of the non-harvested crop is improving as poor and very poor (CBA) crops are down 1% to 53% from 24% a year ago.
Practically irrelevant now, but recent rains have significantly improved soybeans in Argentina, with the share of crops in LML condition falling 8% to 32%, versus 21% a year ago. The harvest is nearing completion, with 94% of the areas harvested, from which 19.55 Mmt were harvested with an average yield of 151 kg/dk. With expectations of up to 700 kmt, weekly soybean sales from the US are 472 kmt. At the lower end of expectations for 150-600kmt are the sales of meal with 268kmt. Soybean oil is again a complete disappointment with 0kmt, with expectations of up to 20kmt.

  • Black Sea Region

An essential part of yesterday’s increase in the price of grain exchanges is a clarification by the Ministry of Agriculture of Ukraine that due to the exploded dam wall, the damage to grain production may reach “several million tons”. And these damages will not be so much from the immediately flooded areas as from missing irrigation, which is a key factor for the good yields in the country in recent years. Several hundred thousand tons of grain stored in river terminals along the Dnieper River were also completely destroyed. The looming irrigation problems come after nearly a month of lack of rainfall in the central parts of the country.
The Russian exporter (Agric), which won the last Egyptian wheat auction with a bid that was $11 below all other Russian exporters, has filed a request to cancel the agreed sale. There is still no official statement from Russia, but local and foreign analysts comment that the reason for this is non-compliance with the price floor approved by the Russian authorities, which is $240 per ton on an FOB basis. The grain union of Russia commented that they “do not accept international exchanges as a reliable price indicator” and “have no interest in sales below cost price”.
For the first time since the beginning of the season, Ukraine reported a week with zero sunflower exports. Exports of sunflower oil, however, remained stable, increasing by 20% compared to the previous week to 110 kmt. The biggest buyers were Turkey with 36kmt and Italy with 20kmt. The export of sunflower meal, on the other hand, fell by 25% to 67.5 kmt, with the biggest buyers being Poland with 15 kmt and Italy with 12 kmt. From the beginning of the season, the export of meal reached 3.2 Mmt, and of oil 4.3 Mmt.