Andrey Sizov
23.05.2022
* Russian-Ukrainian war remains at a stalemate. Russia “perhaps it’s time to negotiate?” Ukraine: “We want all our territory back”. The issue neither party seems to have enough force for a successful offensive
* The longer the war lasts the bigger the risks are for the new Ukrainian crop and key exports infrastructure in SW Ukraine
* Protracted war -> struggling economies. RU GDP is expected to decline by ~10% YOY; UKR GDP -30-40%. RUS helping UKR agriculture (10% of GDP) by unblocking its ports? Seems like an extremely optimistic scenario.
* Lots of political statements about Russia weaponizing grain exports…In our view, it hasn’t so far and the world should really hope that it won’t. SovEcon estimates Russian 22/23 wheat exports at 41 mmt, 20% of global trade. If it’s taken out of global S&D->$20/bu /$800/mt+ #wheat?? Here’s a dedicated thread https://twitter.com/sizov_andre/status/1527353926382604305
* Russian #wheat exports to tumble to 0.8 mmt in May from 2.2 mmt in April thanks to the export quota
* Ukraine is seeding #corn fast – 4.2 mln ha (-14% YOY), way better than the majority of forecasters were predicting. Getting close to SovEcon’s April forecast of 4.4 mln ha and now way above USDA’s 3.5 mln ha (harvested)
* SovEcon publicly released its new Russian #wheat crop forecast of 88.6 mmt (+1.2 mmt). Russian consultancy IKAR said that the crop could reach 85.0 mmt.
* Black Sea news – overall neutral….war in Ukraine vs record-high Russian crop
* Based on weekly Ukrainian market note and Russian market note
