Andrey Sizov
25.07.2022
* The first vessel carrying 26K of Ukrainian corn left Odesa on August 1…around 580K could follow, mainly corn, some sunflower meal, wheat and beans
* Vessels that were blocked in Ukrainian terminals are likely to leave, but new export deals and new vessels are way more important. It’s 0.6 mmt of old exports vs 30+ mmt of new ones
* The grain deal could hold at least short-term thanks to massive political support from Turkey and the US…Russia pulled some of its vessels from the grain corridor region and almost stopped shelling Odesa
* President Erdogan is visiting his counterpart Putin on August 5. Syria and the grain deal are likely to be high on the agenda
* US Secretary of State Blinken spoke to Russian Foreign Minister Lavrov for the first time since the start of the war…officially they spoke about a potential prisoners swap and the grain deal. President Biden today proposed Russia to negotiate a new nuclear arms control agreement…is the diplomacy working behind the scene?
* The war continues: Russia advanced marginally in Donbas and could be preparing for an offensive towards Kharkiv. Ukraine has started a counter-offensive near Kherson and damaged Antonovksy bridge, a key route for resupplying Russian troops in the region
* Russian #wheat FOB prices have been flat all July…$350-360/mt…Matif remains cheaper…Will Russia pull the rest of the world higher or will drop at last to become more competitive? Harvest pressure is growing inside the country on a record-high crop harvest and the ruble is depreciating – this could help exports
* Russian exports are gradually picking up – 0.6 mmt of wheat done last week, +32% WOW but still too slow. 2.3 mmt of wheat were shipped in July (-12% YOY)
* Ukraine shipped around 1.6 since the start of the season, -35% YOY…Could things change substantially during the next several weeks? Current shipment from Odesa probably won’t have an impact on customs export numbers as those products passed the customs clearance in February
* Recent ample rains (up to 50 mm) worsened the quality of Russian winter wheat, are likely to improve the weather setup for spring crops. The overall outlook for the Russian crop is improving further. Feed wheat prices are tanking in the domestic market
* Recent rains in Northern / Central Ukrainian improved corn crop conditions…SovEcon has upped its Ukrainian corn crop forecast
* Black Sea exports are the key numbers to watch short term. Politicians’ statements (inc. August 5) could be of interest
* Based on sizov.report on the Black Sea
