WEEKLY ROUND-UP OF BLACK SEA EVENTS – AUGUST 29

Ukraine starts large offensive in Kherson; wheat rallies 4%+ on Monday

  • Ukraine has started a counter-offensive in the Kherson region…both parties have been preparing for it for months so it’s hard to expect any meaningful results soon

  • Will the grain deal hold? The #wheat market is not sure, December CBOT +4% on Monday

  • We believe that the grain corridor will continue to work at least short-term unless there is a major war course change. Black Sea premiums are likely to rise though as the market has been reminded of how fragile the situation is

  • Ukraine has shipped 1 MMT of foodstuff from Odesa terminals, total official grain exports will be around 2 MMT. 1.2 MMT #corn and 0.6 MMT #wheat have been shipped during Aug 1 – 29 – UA Customs

  • Russian wheat exports are still amazingly low for a such crop…3.5 MMT of wheat will be done in August, almost -36% YOY (!)

  • BUT things could change. The domestic market in Russia is sharply down, export tax down, FOB down, probably weaker ruble closer to 2022 end…Russian #wheat is becoming cheap (at last!), and should see good demand shortly. At the same time, we are not sure if there is a big downside…so don’t get carried away if you want to be bearish

  • Despite substantially bigger Russian #wheat crop estimate (94.7 MMT; + 3.8 MMT to August forecast) we left 22/23 export forecast mostly unchanged – 43.1 MMT (+0.2 MM) as the pace at the beginning of the season has been extremely low

  • Last week we suggested that being short wheat was not a good idea…this recommendation stands. Escalation in the Kherson oblast increases the uncertainty for the global grains market and this could help bulls first of all

  • Based on sizov.report on the Black Sea

Follow the Black Sea grain market

Get your free trial of The Sizov Report — an analytical service covering agricultural markets of Russia, Ukraine and Kazakhstan

Try for free

More Articles for You

Russian wheat prices drop to June lows – SovEcon

Decline in wheat prices continues amid the falling demand.

SovEcon lowers Russian wheat crop forecast

Forecast was revised amid worsening crop prospects in Siberia and the South.

SovEcon: Decline in Russian wheat prices accelerates

The rate of decline picked up in September amid the decrease in demand from domestic consumers and exporters.

SovEcon upped Russian wheat export forecast to a new high

The new estimate is reflecting the record-high wheat sales.

Russian wheat market is reversing

The wheat market is showing signs of a reversal due to diminished domestic demand for Russian wheat and increased supply.

SovEcon: Russia could harvest second largest wheat crop on record

The revision was made in light of rising yields in the Central and Volga regions.