Weekly round-up of Black Sea grain market - June 20

Andrey Sizov 21.06.2022

This is what has happened around the Black Sea during the last week:

* Crop conditions are clearly deteriorating. Ukraine and Southern Russia have been drier than needed with temperatures 1-3C above normal

* The planting campaign is almost over. Ukraine seeded 4.6 mln ha of corn, -0.9 mln ha YOY but way above many earlier estimates (i.e. May WASDE 3.5 mln ha). Fully in line with SovEcon’s forecast

* Russia seeded 12.6 mln ha of spring wheat (-0.5 mln ha YOY). We expected a bigger decline year on year thanks to extremely strict export taxes

* SovEcon upped the Russian wheat crop estimate from 88.6 mmt to 89.2 mmt…smaller winter wheat crop on dryness in the South and a bigger spring wheat crop

* First barley yields in Odesa, a key grain grower in south-western Ukraine are low ~2 mt/ha (-50% YOY)…more eastern regions should have better numbers

* Heavy fighting continues in eastern Ukraine. Russia continues to advance, it seems that it wants to capture the entire Luhansk in the next several days. No signs of any de-escalation after almost 120 days of the war

* Black Sea Ukrainian grain corridors progress seems to remain close to 0…Turkey suggests setting up the routes even w/o demining the ports. We remain skeptical about new shipments from Odesa / Mykolaiv

* On Tuesday Ukraine shelled important Snake Island (near the Danube Delta and not far from Odesa), currently it’s controlled by Russian forces

* President Putin said that Russia would continue to ship grain actively in the new season, predicting total grain exports to rise to 50 mmt (42 mmt in 2021/22)