Sergey Feofilov: Black Sea wheat prices recovery will start from July 2020

The weather and other uncertainties generate great gaps in the 2020 grain production estimates in Black Sea region, incl. Ukraine and Russia.

Wheat harvest in Ukraine will most likely be at 26 MMT as May showers improve the soil moisture and crop conditions impressively.

Now prices win back the expectations of a high supply, but later wheat prices will go up earlier than usual. We expect price recovery in wheat market starting from July.

Corn production and export from the Black Sea region for next season are projected actually at the same level as last season. UkrAgroConsult’s corn area projections are lower than the Government figures. It is unlikely corn area will be at officially forecasted 5.4 Ml ha and will be less by 200-250 Th ha. In the south (where soil moisture is not enough), some corn acreage will be replaced by sunflower.

One more reason for less plantings is corn forward prices are 15-20% lower than the current level. Farmers may partly switch to soybean that is of higher demand both from crushers and exporters.

Barley is the next critically important market for the Black Sea countries. We forecast insignificant decrease in total barley exports – in spite of shrinking barley production both in the Black Sea and EU.

Our stable export expectations are explained by unusually large barley ending stocks of the 2019/20 season in Russia.

More detailed information on the latest trends in grain exports, supply and demand balances with breakdown by crop, price behavior, crop conditions and progress in harvesting/planting in the countries of Black Sea Region is available to subscribers for Online Analytics "Black Sea Grain" in the new innovative tool for agri market participants – AgriSupp by UkrAgroConsult. Subscribe to a 14-day free trial!!

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