Ukrainian market review from Spike Brokers

As of September 4, 28.8 million tons of grain and oilseed crops were harvested in Ukraine (29.1 million tons on this date last year), including: wheat – 21.9 (21.8) million tons, barley – 5.3 (5.5) million tons, rapeseed – 3.2 (3.4) million tons, sunflower – 0.208 (1.4) million tons, soybeans – 135 thousand tons.

 

Exports of agricultural products in August decreased compared to the corresponding period last year from 4.7 to 3.7 million tons, in particular: wheat - from 2.2 to 2 million tons, rapeseed - from 794 to 519 thousand tons, corn - from 645 to 229 thousand tons, barley - from 469 to 323 thousand tons, soybeans - from 207 to 205 thousand tons.

 

Corn harvest in Ukraine, as expected, started late, and as of September 5, only 1.5 thousand tons had been threshed (compared to 460 thousand tons on this date last year). Therefore, August exports were historically low.

 

Spot prices with delivery to the port are $205-215/t, and a premium is offered for deliveries within 10 days. External demand has become more active. In Italy, prices increased by €2-3/t to €220/t FCA Ravenna/Venice in a week. For Ukrainian corn with delivery by Eurocars to the western border in October-December, Italian buyers offer €185/t. In Northern Europe, where the corn harvest is larger, prices are €190-200/t.

 

Wheat harvest in Ukraine is almost complete, and the market is balancing supply and demand. Food wheat prices are falling under pressure from increased supply from major northern hemisphere producers, while feed wheat prices are supported by delayed corn harvests. Processors are actively buying food wheat within the annual demand range of 9 to 7 million tons, building up stocks for 3-5 months, and are offering a premium of $5/ton compared to exporters for quality grain with gluten over 20% and protein 11.5%.

 

As of September 4, only 208 thousand tons of sunflower were harvested in Ukraine (1.4 million tons last year). Because of this, during the week its prices increased from $670 to $680/ton with delivery to the factory. After a long rise, prices for sunflower oil began to fall, despite the shortage of offers on the world market for delivery in September-October. In the ports of Northern Europe, sunflower oil with delivery in September is offered for $1,350-1,400/ton, in October-December - $1,260-1,300/ton, in January-March - $1,220-1,250/ton. Traders are actively buying oil with late delivery in anticipation of price increases.

 

Rapeseed exports from Ukraine have stopped. Traders, in anticipation of the introduction of export duties, have been buying rapeseed exclusively from producers since August, but this did not save them, as on September 4, customs canceled all periodic customs declarations, including from producers who were supposed to be exempt from duties. The lack of a mechanism for confirming their own production of goods forces farmers to pay 10% of the duty until the origin is established. Due to the imperfection of the legislation, traders are suffering losses from ship downtime while business and the government are negotiating. Processors took advantage of the situation, lowering prices from $600/t to $585/t in a week, as farmers will have no alternatives for selling rapeseed for at least a month until the legislation changes. Export prices for rapeseed fell by $15-20/t to $520-530/t over the week, and for rapeseed oil by $30/t to €1,050-1,060/t FOB northern ports.

 

Export prices for soybeans for October-November delivery rose to $396-400/t at the SPT port, while processors reduced prices for October deliveries by $10/t to $435-440/t including VAT. Currently, the soybean harvest rate is 1 million tons lower than last year. Soybean oil prices remained at €1,090-1,105/t FCA Hamburg during the week.