Andrey Sizov
19.09.2022
This is what happened around the Black Sea since the previous Monday:
* Grain corridor remains the biggest news by far. The deal still holds, almost 4.0 mmt has been done, 1.1 mmt last week vs 0.8 mmt a week ago
* Putin’s comments about the corridor in Uzbekistan after meeting with Erdogan were relatively peaceful…contrary to what the market has been expecting earlier
* Question – can Putin actually terminate / not extend the deal? I don’t have an answer but it seems that the Kremlin started to get really annoyed with the deal (but it’s still there)
* Discussion about the Togliatti-Odesa ammonia pipeline should be watched…Russia wants its resumption with the help of the UN. Kiev says no for now for political reasons. Taking into account that RU could be selling ammonia to the US firm at the border this still can work. The story probably is not over. If there is an ammonia deal that should support the “grain deal” as well
* Ukrainian grain exports could be close to 4 mmt in September with #corn accounting for around a half and wheat for 40%. 22/23 exports lag 45% YOY
* Russian wheat exports are picking up after it has regained its competitive edge..should see 1+mmt this week for the first time in many months
* September volume is estimated at 4.3 mmt, not bad but still below the average 4.6 mmt
* Second half of the season (Jan-Jun) could be more important for RU export program than it typically is….it needs to ship its enormous crop while its export program has been lagging so far
* Russian crop is just getting bigger as spring wheat regions with a few exceptions also report great yields…Almost 100 mmt of wheat harvested (in bunker weight!)
* Huge sell-off in wheat on Monday on no news mostly…we have been bullish and now we are bullish short-term as well
* Based on sizov.report on the Black Sea grain markets
