Europe turns its attention to grains from Russia – analysis of grains and raw materials

Yesterday, the Matif May wheat contract closed up €2.25 to €197.25 per tonne. On the Chicago Mercantile Exchange, wheat showed a significant upward correction. The Chicago May wheat contract closed 2.7% higher at $5.42 a bushel. Corn futures moved mainly sideways, closing 0.2% lower at $4.36 a bushel. Soybeans fell 0.9% to $11.87 per bushel.

Russia's attacks on port facilities in Odessa last Sunday once again illustrate the vulnerability of grain exports from Ukraine. This is of course not new news, but players in the grain market have faced the facts. Ukraine has exported 32.4 million tons of grain so far this season, according to the Ukrainian Ministry of Agriculture. This is 9.4% lower than last season. Wheat exports increased by 5% compared to last season, reaching 12.9 million tons. Ukraine also exported 1.9 million tons of barley, 16% less than last season, and 17.4 million tons of corn, 17% less. The bulk of exports flow through the Black Sea or the Danube River. It is possible that the area of ​​spring wheat in Ukraine will reach 204 thousand hectares this season, compared to 280 thousand hectares last season.

Protests
The European Commission is in trouble with the protesting farmers. With elections approaching, Brussels appears ready to make concessions. The Green Deal's sharp edges with regard to agriculture have been largely removed. It remains to be seen how Member States will translate these deleted requirements into national policy. In order to maintain pressure, Polish farmers closed two border crossings into Germany on Monday. So far, border blockades have mainly focused east of the border with Ukraine. Polish farmer interest groups announced new measures for Wednesday.

In addition to the Green Deal, importing cheap grain from Ukraine remains the other sore point for European farmers. It seems that the European Commission now wants to divert attention from this matter by imposing restrictions on the import of grains and oilseeds from Russia and Belarus. The Financial Times reported that Brussels wants to impose a tax of 95 euros per ton on grains from Russia and Belarus and a 50% import tax on oilseeds and their derivatives from these countries. Russia and Belarus together produce more than 70% of the rapeseed meal imported by the European Union. Russia is only a small player in the European grain market. With 290,000 tonnes of wheat, it represents just under 5% of European wheat imports, according to the latest figures from the European Commission. For comparison, number 1 this season is Ukraine, which exported 4.4 million tons of wheat to the European Union, and number 2, Canada exported 630 thousand tons of wheat to the European Union.

Harvest expectations in Brazil fell again
Soy players don't seem to be affected by the new reports from Brazil. According to Patria Agronegocios, 62.3% of the country's soybeans have been harvested compared to 62.9% last season. Therefore, lead in the harvest turned into a defect. This does not come as a surprise due to the delay in planting part of the soybean area. Safras & Mercado once again slightly revised its soybean harvest forecast. The total harvest is now estimated at 149.08 million tons. This is 0.3% lower than the agency's estimate for February. Last season, 157.83 million tons of soybeans were studied in Brazil. The area planted with soy is 45.41 million hectares, according to Safras. Productivity in the Savras and Mercado samples ranges from 3.29 to 3.55 tons per hectare.