We witnessed another challenging week for global grain markets and exchanges. Against a backdrop of unfavourable climate conditions in many parts of the world, several market reports emerged during the period, signalling a downward trend and putting more pressure on the grain markets.
Don't Have Time to Read the Entire Market Report? Here's What You Need to Know:
New Funds for the Sector? - Bulgarian State Fund Agriculture announced that the total budget for sub-measure 4.1 "Investments in Agricultural Holdings" from the Rural Development Program has been increased by a new 70 million leva, now totalling just over 540 million leva.
What Are the Expectations in Ukraine? - the ministry of agriculture announced that it maintains its forecasts for areas with winter wheat unchanged at 4.36 million ha for the new season. Also, 89% of the sowing work has been completed.
What Is Europe Doing to Address the Crisis? - Faced with renewed tension in the Odessa region, European grain operators are cautious about dynamics and activity in Ukraine. On the political front, European Commission President Ursula von der Leyen recommended the start of EU membership negotiations with Ukraine and Moldova.
New Data on Global Production - USDA updated its data showing global wheat production reduced by 1.5 million tons, while Russian wheat production increased its volumes for 2024 by 5 million tons accounting to 90 million tons.
In Bulgaria, the State Fund Agriculture announced that the total budget for sub-measure 4.1 "Investments in Agricultural Holdings" from the Rural Development Program has been increased by a new 70 million leva and now totals just over 540 million leva.
The amount ensures the possibility of concluding contracts with all project proposals that have received 35 points according to the selection criteria.
Amendments to the Guidelines for applying under the procedure have been made by order of the Deputy Minister of Agriculture and by the Head of the Managing Authority of the RDP 2014-2020, Tanya Georgieva.
The goal is to implement projects that increase competitiveness of agricultural holdings, including the introduction of innovation, digital technologies for production and organization in agriculture, and the automation of work processes in the sector.
Days ago, as instructed by the Bulgarian Prime Minister Nikolay Denkov, Violeta Bozhanova was appointed Chairman of the Agricultural Academy. The change in leadership of the Agricultural Academy comes after the ex-chairman, Martin Banov, was accused of illegal alterations in field categories, along with the deputy director of the Institute of Soil Science, Veneta Krasteva.
In the Black Sea region, export duty on Russian wheat will be 4544.9 rubles ($49.3) per ton from November 15, 2023, according to data from the local Ministry of Agriculture.
The export duty on barley will be zero, while the duty on corn will remain at 1102.6 rubles ($11.96) per ton, the ministry explained. Wheat export duty rate is calculated at an indicative $253.1 per ton, barley at $165.5 per ton, and corn at $188 per ton.
The tariffs are applied from the third working day after their publication and will remain in force until subsequent duties begin to apply.
Meanwhile, Russian President Vladimir Putin told Kazakhstan's President Kassym-Jomart Tokayev that in recent years, Russia has transformed from an importer to a major exporter of agricultural products.
"In Russia, we are proud of what we have done in the last eight to ten years in agriculture, when Russia turned from an absolute importer of agricultural products into the biggest exporter and is the world's leading exporter of wheat," said Putin.
As the topic of the Black Sea corridor remains contentious, the country's Foreign Minister, Sergey Lavrov, expressed his views. At the round table with UN representatives, he noted that the efforts made by UN Secretary-General Antonio Guterres and UNCTAD’s Secretary-General Rebecca Greenspan remain fruitless.
Russian President Vladimir Putin earlier noted that Russia-specific provisions of the deal have never been fulfilled, despite the efforts of the United Nations, as several Western countries never intended to fulfill their promises to unblock Russian exports.
On the other side of the front line, regarding the new season in Ukraine, the agricultural ministry announced that it maintains its forecasts for areas with winter wheat unchanged at 4.36 million hectares for the new season. Currently, according to the same source, 89% of the sowing work has been completed.
On the Old Continent, the latest data published by the European Commission shows wheat exports of 9.95 million tons, confirming a slower pace than last season. The same applies to barley, where volumes have again decreased by 2.47 million tons compared to the previous season. Grain exporters are closely monitoring demand trends and the price difference between Russian grain and European competitors.
Faced with renewed tension in the Odessa region, European grain operators are cautious about the dynamics and activity from Ukraine. On the political front, European Commission President Ursula von der Leyen recommended the start of EU membership negotiations with Ukraine and Moldova.
Across the ocean, there is a real risk of a decline in U.S. production, as meteorological models do not show much hope for improvement in the situation. USDA announced corn production for 2023-24 at 130 million tons, which is 5 million tons less than its last estimate.
In the US harvest is progressing well with 81% of corn areas and 91% of soybean areas already harvested. The planting of winter wheat is also 90% complete compared to the average for the last 5 years.
The Week at Agriniser
The week at Agriniser had a continued cycle of new grain offers - negotiations – deal matching, driven by the need for capital resources for the new season.
We launched another campaign for its users just before the long-awaited "Black Friday" period. Our users have a chance to win a free 3-month Agri Plus subscription.
The requirements – listing an offer to buy or sell grain on the Agriniser marketplace. The three winners will be drawn next Monday, November 20 at 15:00 hours.
Grain export in November
By mid-November, exports from the country reached just over 850,000 tons. Aside from the usual exporters like Indonesia, Algeria, and Spain, notable purchases include Thailand – 55,000 tons of wheat, Morocco – 30,000 tons of barley, and the USA – 33,000 tons of wheat.
On the neighboring markets, the Republic of Turkey made purchases of a total of 7,000 tons of grains, while Romania bought a symbolic quantity of feed wheat (700 tons) from the port of Vidin.
Global Grain Markets
On the international scene, USDA reported the exceptional sale of 126,000 tons of American soybeans to China, as well as 289,575 tons of corn to Mexico.
The Ministry of Agriculture, Forestry, and Fisheries of Japan (MAFF) purchased a total of 108,890 tons of milling wheat from the United States, Canada, and Australia in a regular tender last Thursday.
Japan, the sixth-largest wheat importer in the world, firmly maintains imports of its second most important product after rice, buying most of the grain through tenders usually held three times a month.
The state grain agency of Tunisia announced an international tender for the purchase of about 50,000 tons of durum wheat, European traders reported on Monday. The deadline for submitting price offers in the tender is Tuesday, November 14.
The shipment is sought for delivery in 2023 between November 25 and December 20, depending on the origin of supply.
Funding for the purchase is provided by the African Development Bank (ADB), one of the agencies assisting Tunisia in its difficult economic situation, according to Reuters.
Offers will be accepted from ADB member countries. Member states include major Western European countries, the United States, Canada, and Argentina, but excluding countries from the Black Sea region, including Russia, as stated on the ADB website.
As of November 10, DAP prices Constanța, Romania were: milling wheat – 223 euros/ton, feed wheat – 208 euros/ton, corn – 187 euros/ton, barley – 172 euros/ton, sunflowerm seeds – 387 dollars/ton.
USDA updated its data, as a result of which global wheat production was reduced by 1.5 million tons, while Russian wheat forecast for 2024 increased by 5 million tons, accounting to 90 million tons.
On the demand side, there is an increase of 1 million tons in Chinese imports, considering the importance of this figure for the EU. The balance for corn was also adjusted, but production remains at 59.80 million tons, leading to imports of 24.50 million tons.
In a new report on the supply and demand of cereals, published last Friday, FAO maintains its forecast for global cereal production in 2023 at 2,819 million tons, which is a record high.
Some country-level corrections were made, particularly higher coarse grain production in China and most of West Africa, and lower forecasts for the USA and EU.
Wheat production forecasts were increased for Iraq and the United States and revised downwards for the European Union and Kazakhstan.
Global rice production in 2023/24 is forecasted to increase slightly each year. New revisions include an upgrade in production in India, which more than compensates for various other revisions, especially in the lowering of Indonesian production.
The forecast is for global cereal consumption in 2023/24 to reach 2,810 million tons, with total wheat consumption expected to exceed 2022/23 levels, while rice consumption is expected to decrease compared to its level from the previous season.
Global grain trade in 2023/24 is forecast at 469 million tons, a contraction of 1.6 percent compared to the previous year.