Andrey Sizov
06.06.2022
* Russian troops advance in eastern Ukraine, control 90%+ of Luhansk but still not the whole region
* Still no public negotiations. Ukraine wants to continue the war with the help of new heavy western weapons; Russia wants to push further into Luhansk and Donetsk. The issue is both parties lack the resources for achieving something resembling a victory
* Russian troops shelled Nikolaev, on Saturday one of the large grain and oil terminals (as per several sources – it was Nika-Tera, 4-5 mmt of grain turnover) caught fire. Perhaps the market is overreacting to this
* Russia and Turkey are to hold talks this week about deblocking of Ukrainian terminals. We still believe that the chance that will start to operate freely is low…Ukraine needs concrete guarantees that Russia won’t land its troops near ports, the Kremlin wants some sanctions to be lifted…hard to see how both issues could be addressed
* SovEcon estimates 22/23 Russian wheat exports at a record-high 42.3 mmt (if the government doesn’t intervene)
* GASC held the first 22/23 tender, the state firm bought 465K of wheat at an impressive $480 C&F (180 payment delay), Romania is to supply 240K, Russia – 175K
* Ukraine planted 4.6 mln ha of #corn, -13% YOY (SovEcon estimate of the final planted area – 4.6 mln ha; USDA – 3.5 mln ha harvested)
* Parts of Ukraine got timely rains with 15-30 mm of precipitation; Southern Russia got 0 rain and was 2-5C hotter than normal. Overall weather outlook for the Black Sea is worsening…
* Based on weekly Ukrainian market note and Russian market note
