• Continued instability in the grain market. Farmers and traders are witnessing unprecedented price fluctuations due to the tense global context.
Fluctuations in grain prices create excitement among farmers and grain traders around the world. With limited resources and logistics due to the Ukraine-Russia armed conflict, the situation does not appear to be improving any time soon.
Added to this is the surprising decision of American farmers to sow 1 million hectares less corn, according to the report sent by the United States Department of Agriculture (USDA). The same report shows an increase of 0,89 million hectares in soybeans. With corn and soybeans totaling 73 million hectares, soybeans would be planted on 36,8 million hectares.
The global wheat market
Current wheat stocks, worldwide, according to data provided by USDA, covers just two and a half months of supply, making it the lowest level in 14 years. These calculations exclude China, which holds half of global wheat stocks and exports negligible amounts.
A former member of the United States Department of Agriculture tells Successful Farming, the American agricultural portal, that "The global wheat market will remain very tight unless we have a record wheat harvest in the US and Europe."
Surprising decision of American farmers
Although Russia's invasion of Ukraine has caused continued uncertainty in grain prices, American farmers have not opted to expand spring wheat acreage. Contacted by the USDA, nearly 78.000 farmers said they would cut their spring wheat seeding by 2 percent, or 4,5 million acres.
North Dakota, America's top spring wheat state, is cutting its seeded acreage by 5% from 2021 levels.
Data collected by the USDA indicates that 69 percent of winter wheat acreage is affected by drought, mostly in the central and southern Plains, as well as the Pacific Northwest.
Difficult transportation of grain from Ukraine
Opting to export grain by rail, Ukraine is having trouble finding suitable wagons to transport grain to the country's western border. APK-Inform states that traders are currently looking for alternative transport routes, given that the Black Sea ports are blocked by the armed conflict with Russia.
"Traders continue to look for ways to divert exports to the EU by rail or through Romanian ports. But the main obstacle remains the high cost", say the specialists APK info. The delivery of Ukrainian grain to the port of Constanța amounts to 120-150 euros per ton, while before the war traders paid around 40 dollars to transport grain to Ukrainian ports on the Black Sea.
Export of Ukrainian grains through the port of Constanța
Ukraine's Ministry of Agriculture stated that discussions are currently underway with Romania to ship its agricultural exports through the port of Constanța. It seems that, however, according to APK-Inform, the asking prices for Ukrainian wheat on the export market have started to decrease.
In the week of 28.03.2022-03.04, supply for feed barley increased by an average of $2022/t to $5-375/t FOB Black Sea, for July-August delivery.
Prices for Ukrainian wheat with 12,5% and 11,5% protein fell by USD 20-25/t to USD 415-435 and USD 405-425/t FOB Black Sea for delivery in April.
New crop wheat prices fell $10-30/t to $360-390 and $350-385/t for July-August delivery.
Article written by Gabriela Dan, Editor of Arta Albă
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