WEEKLY SUMMARY 41 (11.10.2021 – 17.10.2021)

News from the markets in Bulgaria

  • With continued heavy rainfall throughout the country, the current weather conditions are a dream come true for every farmer in Bulgaria. After a good soaking in the West, from yesterday we reported the monthly norm in the East, and it will remain rainy until the end of the week. Then, as with a magic wand, the models show permanent (for now) warming and drying.
  • With declining production and stocks in the world, yesterday’s USDA report brings good news about wheat prices. The exact opposite is happening in the markets of corn and soybeans, which will probably have a negative impact on prices in our country. On the other hand, the harvest of corn and sunflower in Ukraine is the slowest, at least 10 years, leading to a decline in production. Less corn and sunflower, the USDA see in Russia.
  • In support of prices in our country remains the unprecedented, as for mid-October, export activity from Bulgarian ports, as we currently see loading 7 ships for corn, 2 for wheat and one for barley. In the expected raid, we see more corn, wheat, barley and a large ship for rapeseed.

News from the markets in Europe

  • The USDA is lowering world wheat production and stocks above expectations by 4.5Mmt, to 776Mmt (2020/21 – 775Mmt) and 277Mmt (288), respectively. However, the estimate for EU production has been increased by 0.4 to 139.4Mmt (126). Exports have also increased by 0.5 to 35.5Mmt (30), with the EU already outpacing Russia and officially once again exporting №1 to the world. The French Ministry also published the October balances and, surprisingly, wheat was reduced by 0.9 to 35.2Mmt. Barley production in France also decreased by 0.3 to 11.4 Mmt.
  • However, the summer rains, which have worsened the quality and quantity of winter crops, have contributed to the production of spring crops, with the French Ministry increasing maize by 0.9 to 13.9 Mmt. The USDA agreed and increased the EU harvest by 0.8 to 66.3 Mmt (64.4). Imports are unchanged at 15 Mmt (14), and due to increased consumption stocks even fall. Regarding barley in the EU, the USDA reduced production by 0.3 to 54.3 Mmt (55.5), and exports remained unchanged at 7.3 Mmt (7.8).
  • Entirely at the expense of Canada, the USDA again reduced rapeseed production in the world by 0.8 to 64.4 Mmt (72.5). However, like wheat, the EU harvest has increased by 0.3 to 17.1 Mmt (16.3). There is also a significant decline in sunflower production in the world, from 1.15 to 55.86 Mmt (49.1). The EU is part of the decline, albeit with only 50km to 9.95 Mmt (8.84). Fewer seeds lead to reduced processing and production of oils and meal.

News from the markets in America

  • Surprisingly, the USDA reduced wheat production in the United States by 1.4 to 44.8 Mmt (49.8), with the decline coming from both yields and acreage. Significantly for the prices, the stocks have been reduced by another 1 to 15.8 Mmt (23), as these will be the lowest stocks since 2008. The harvest in Canada was also reduced by 2 to 21 Mmt (35), and exports fell by as much as 15 Mmt (26.4). Production in Australia and Argentina is unchanged at 31.5 Mmt (33) and 20 Mmt (17.7). However, exports from Australia increased by 0.5 to 23.5 Mmt (24). Imports of wheat into China are unchanged at 10 Mmt (10.6).
  • World corn production is almost unchanged at 1198 Mmt (1116), but stocks increase by 4 to 302 Mmt (290). Corn production and stocks in the United States also increased above expectations, by 0.5 to 381.5 Mmt (359) and 2.3 to 38.1 Mmt (31.4), respectively. The balances in Brazil and Argentina are unchanged, with production of 118 Mmt (86) and and 53 Mmt (50) and exports of 43 Mmt (20) and 38 Mmt (37.5). The harvest in China may be a record 273 Mmt (261), but imports are unchanged at 26 Mmt (28).
  • World soybean production increased by less than 1Mmt to 385 Mmt (365), but stocks increased by 5.5 to 104.6 Mmt (99). With increased yields, the harvest in the United States increased by 2 to 121 Mmt (115), and due to increased initial stocks (old harvest), the final increase increased by nearly 4 to 8.7 Mmt (7). With good rainfall and fast sowing so far, the harvest in Brazil is unchanged at 144 Mmt (137). With no rainfall and already active La Niña, Argentina has been lowered by 1 to 51 Mmt (46). Soybean imports to China are unchanged at 101 Mmt (99).

News from the markets in the Black Sea region

  • The USDA leaves the wheat balances in Russia and Ukraine almost unchanged, with their yields remaining at 72.5 Mmt (2020/21 – 85.4) and 33 Mmt (25.4). The export of 35 Mmt (38.5) and 23.5 Mmt (17) is also unchanged. Due to the dry and hot summer, the rating for Kazakhstan drops again, by 0.5 to 12 Mmt. Exports are unchanged at 7.2 Mmt (8), imports also at 0.8 Mmt, but according to Russian analysts it will be at least 1.5 Mmt and almost entirely from Russia. Barley production in Russia decreased by 0.7 to 17.3 Mmt (20.6), Ukraine remained unchanged at 10.5 Mmt (8).
  • The corn harvest in Ukraine has been record slow, at least for the last 10 years, with only 14% completed as of October 7, compared to an average of 40% so far. The USDA attributes this to rainy weather, but given the dry conditions of the last 2-3 weeks, there is certainly an element of farm reluctance. Whatever the reason, slow harvesting leads to a decline in quality and quantity, with yields reduced by 1 to 38 Mmt (30). The harvest in Russia was also reduced by 0.5 to 15 Mmt (13.9). Ukraine’s exports fell by 0.5 to 31.5 Mmt (23.8), Russia by 0.3 to 4.5 Mmt (4).
  • Due to the September rains, the sunflower harvest in Ukraine, according to the USDA, is also the slowest, at least for the last 10 years. For this reason, they reduce the average yield and yield by 3% to 2.43 t / ha and 17 Mmt (14), respectively. The areas are without change of 7 Mha. Without giving a breakdown, for the same reason the harvest in Russia was reduced by 0.5 to 15 Mmt (13.3). All this reduces the processing and production of sunflower oil and meal. There is also a decline in seed exports, with Russia reduced by 150 kmt to 800 kmt and Ukraine by 50 kmt to 350 kmt.