Andrey Sizov
15.08.2022
This is what has happened around the Black Sea since the previous Monday:
* 16 vessels with around 0.45 MMT of food products, mainly #corn, left the Odesa terminals, and several inbounds vessels have arrived…there is no FOB market at the moment but things could change if/when we see more vessels going in and out
* At the current pace, Ukraine could ship around 1 MMT per month from its deep-sea terminals. Russia has stopped shelling Odesa and keeps approving vessels, we wonder for how long this will last.
* The grain deal agreement doesn’t clearly specify how vessels’ inspection/registration process works but probably there are plenty of loopholes to find if Russia wants to slow down the flow
* Russia and Ukraine are blaming each other for shelling Zaporozhie Nuclear Power Plant (ZNPP)…this should be watched
* Ukrainian Jul-Aug grain exports – 2.3 MMT (-45% YOY)
* Russian shipments remain slower than needed for such crop and S&D….we estimate August #wheat exports at 3.5 MMT…29% below average
* Global #wheat market is consolidating…CBOT broke above May-August downtrend…the chance that the bottom is behind us is rising. Russia does it best to support the global market – FOB has been around $350 for weeks no matter what Matif&CBOT do
* GASC has been silent for some time….not sure if it’s a good tactic
* Crude is pricing in a further economic slowdown? -30% from June highs and the recent spike in prices didn’t last for long. Not good for ags…
* WASDE: Russian wheat crop upped at last by 6.5 mmt to 88 mmt, more reasonable but still very low. More importantly, the export revision was much modest – only +2.0 mmt, now almost in line with SovEcon’s estimate (42.9 mmt)
* Ukrainian corn crop upped 5.0 mmt to 30.0 mmt, also almost in line with SovEcon’s 29.6 mmt. Corn exports were upped by 3.5 mmt to 12.0 mmt, wheat – 1.0 mmt to 11.0 mmt. Those are still modest numbers which could reflect USDA’s doubt about the grain corridor, makes sense
* Good precipitation is helping Ukraine’s corn…Russia is dry, this could hurt late crops but it’s probably too late to substantially impact spring wheat
* Based on sizov.report on the Black Sea
