WEEKLY SUMMARY WEEK 15
During the first ten days of April, the agro-meteorological conditions are determined by unstable weather with frequent rainfall, which will improve soil moisture reserves and the conditions for the development of autumn crops and sown spring crops, NIMH informs. The rainfall in recent days increases the moisture reserves in the upper soil layer, which in the east is still deficient after the snowless winter.
In the first half of April, the development of agricultural crops will take place at a moderate pace, at temperatures close to climatic norms. During the first ten days wheat will undergo the twining, transition to spindle and spindle phase for crops in the Danube Plain and in the southern regions
A significant improvement in thermal conditions and an acceleration of vegetation for agricultural crops is predicted in the second half of April.
The market information system of the UN – AMIS, still does not have a forecast for the production of grain and oil crops in the World in the new season, and in their last one for the current season, they generally make “cosmetic” changes. Almost entirely from Australia, world wheat production rose by 2Mmt to 797Mmt (2021/22 – 778Mmt) and despite increased trade and consumption, stocks rose by nearly 4Mt to 309.5Mt (294). Three months before the end of the season, AMIS make significant changes to EU wheat balances, lowering the harvest by 0.4Mmt, increasing imports by 0.5Mt and increasing stocks by 1.2Mt.
By 2.5Mmt to 1159Mmt (1212), AMIS also boosted global corn production, mainly coming from Ukraine. With trade and consumption largely unchanged, inventories were also largely unchanged at 194Mmt (196.5). Consumption in the EU decreased by over 1Mt, and exports by 0.3Mt, leading to an increase in stocks by 0.7Mt. According to AMIS satellite analyses, the condition of winter crops in Europe is good (ie, above-trend yields are expected) and the conditions for their development so far favorable.
According to AMIS, the chances of El Niño after July increase to 61%, which, among other things, means more precipitation in the Mediterranean, on the periphery of which Bulgaria is located. The world food price index has fallen for 11 consecutive months, and in March the wheat index fell by 7.1%, corn by 4.6%, soy by 3.8% and rice by 1.5%. Fertilizer market prices also fell for another month, with ammonia in Western Europe falling by 28% monthly and by 63% annually. Urea in the Black Sea is at an annual low, becoming cheaper by more than 2 times compared to March 2022. Ammonium phosphates are cheaper on average by 28% on an annual basis in Europe, and potash in the USA by 51%.
AMIS leave U.S. wheat balances largely unchanged, basically just lowering imports. Australia’s harvest increased by 2.6Mt, exports by 2Mt, and with reduced consumption and imports stocks increased by 1.4Mt. The harvest in Argentina was reduced by 0.3Mt, exports by 0.5Mt, stocks by 0.2Mt. A day before the Easter holiday, US wheat markets are closing weak and we still don’t see anything bullish from a technical perspective. Weekly sales are also unimpressive at 194kmt, with expectations for 100-350kmt.
With active support from China, weekly US corn sales were at the upper end of expectations, reporting 1,247kmt. AMIS lower US exports by 3Mt and raise inventories by 1.9Mt. Brazil’s crop was unchanged, but exports were still up 2.5Mt, while with Argentina’s crop again unchanged, exports were down 5Mt. After rains in the previous weeks, Argentina reported a minimal improvement in corn as poor and very poor crops fell by 1% to 52%. The harvest is 10% complete, the average yield is 389kg/ha.
The sunflower harvest in Argentina is 85% complete, with 3.27Mmt harvested with an average yield of 195kg/ha. Soybean harvest is not yet reported, and its condition, like corn, improved by 1% to 66% in poor and very poor. AMIS cut the harvest in Argentina by 9Mmt, and interestingly, they also cut Brazil by 1.5Mmt. Exports from Brazil, however, rose by 1Mmt, while processing in Argentina (No. 1 in the World) will be offset by increased imports by 3Mmt. The weekly sales of soybeans from the USA are tragic, with 155 kmt reported against expectations of 200-600 kmt. Grit is at the lower end of expectations at 246kmt, while for the first time in the season, oil exceeds them by 28kmt.
Black Sea Region
AMIS raise their estimate for Ukraine’s old wheat crop by 0.2Mmt, which, absent other changes, will go into stockpiles. Russia has decreased by 1.4Mt of exports, which go to an increase in stocks. Out of all of Europe, where they are in “good” condition, only winter crops in southern Ukraine are in “satisfactory” condition. The report, however, is as of March 28 and apparently does not include the recent heavy rainfall in this region
As mentioned, the main reason for the increase in the World corn crop is Ukraine, where AMIS raised their production estimate by 1.5Mt. With unchanged exports and consumption, the increase goes to the growth of stocks. Corn balances in Russia are unchanged, but the soybean harvest has increased by 0.2 Mmt. Soybean balances in Ukraine are also unchanged
The Ukrainian Ministry of Agriculture predicts that by the end of the season, the country will be able to export another 15.6 Mt of grain and oil crops and products, of which 10 Mt will be along the grain corridor, i.e. by ships, and another 5.6 Mmt by alternative routes, i.e. on trucks, railways lines and river barges. Since the beginning of the season, the reported grain export was 37.2 Mmt, of which 20.6 Mmt were sent via the “grain corridor” and 16.6 Mmt via other means of transport.