June 29, 2022

Kansas City Fed Reviews Market Disruption; Ukrainian cereal production could increase; Egypt faces strains of wheat – AgFax

Bloomberg writer Yvonne Yue Li reported yesterday that “farmers are still making money despite the higher costs for fuel and fertilizers, such as crop prices have risen again.

“Commodity Market Turmoil After Russia’s Invasion of Ukraine,” by Cortney Cowley, David Rodziewicz, and Thomas R. Cook. The Federal Reserve Bank of Kansas City (May 23, 2022). Click on the image to enlarge

“It is the point of view of Federal Reserve Bank of Kansas City scholars, who see Russia’s invasion of Ukraine have ‘long duration‘ effects on commodity markets. “The disruptions associated with the invasion contributed to commodity price increaseswho could support regions and companies producing raw materials,” they said in a statement on Monday. report.

“Russia and Ukraine are key producers and exporters of energy and agricultural products, such as natural gas, wheatand fertilizer. The prices of these raw materials have leaps since the invasion of Ukraine by Russia and punishments that followed disrupted production and the flow of goods.

“Commodity Market Turmoil After Russia’s Invasion of Ukraine,” by Cortney Cowley, David Rodziewicz, and Thomas R. Cook. The Federal Reserve Bank of Kansas City (May 23, 2022). Click on the image to enlarge

The Kansas City Fed report also noted that “although manufacturing costs for wheat farmers have increasedthe prices producers receive for their wheat were higher than production costscreate better positive profit margin opportunities.”

“Commodity Market Turmoil After Russia’s Invasion of Ukraine,” by Cortney Cowley, David Rodziewicz, and Thomas R. Cook. The Federal Reserve Bank of Kansas City (May 23, 2022). Click on the image to enlarge

Meanwhile, Reuters writer Pavel Polityuk reported today that “Analyst APK-Inform on Tuesday raised its forecast for Ukraine’s 2022/23 grain harvest and exports due to a better than expected winter harvest.

The consultancy said in a statement that Ukraine could harvest 48.3 million tons of grain in 2022, including nearly 17.1 million tons of wheat and 25.2 million tons of corn.

“APK-Inform said Exports 2022/23 could also reach 39.4 million tons compared to the previous forecast of 33.2 million tons. »

And yesterday, Reuters editors Gus Trompiz and Forrest Crellin reported that “the European Union’s crop monitoring service, MARS, on Monday lowered its return forecasts for this year EU wheat, barley and rapeseed harvests due to the drought and said that significant rains were needed to avoid additional yield losses.”

“In a monthly report, MARS lowered its 2022 EU yield forecast for soft wheat – the bloc’s largest cereal crop – to 5.89 tonnes per hectare (t/ha) from 5.95 t/ha expected last month.

“It is now 2.5% below 2021 level although 0.9% above the average for the past five years, he said.

As for the American production, DTN Editor-in-Chief Anthony Greder reported yesterday that “US farmers had another productive week last week, pushing maize sowing at almost three quarters mark of completion and half way soybean sowing point, the USDA NASS stated in its weekly crop progress report Monday.”

The DTN article noted that “Nationally, winter wheat scored 28% good to excellentup 1 percentage point from 27% the previous week. It’s the the lowest such note since the 1989 droughtnoted DTN chief analyst Todd Hultman.

spring wheat been 49% planted, behind the five-year average of 83%.

In the more specific evolutions of agricultural trade, Bloomberg News reported yesterday that “Russian blockade of Ukrainian ports is a ‘declaration of war‘ which threatens to trigger mass migration and a global food crisis, a United Nations official has said, adding to dire warnings from the opening day of the World Economic Forum in Davos.

Yesterday too, Bloomberg writers Anisah Shukry and Yantoultra Ngui reported that, “Malaysia to stop exports of 3.6 million chickens per month from June 1 and remove the approved permit requirement for importing wheat until production and prices stabilize, Prime Minister Ismail Sabri Yaakob said.

And Reuters News reported today that “India plans to restrict sugar exports for the first time in six years to prevent a spike in domestic prices, potentially capping this season’s exports at 10 million tonnes, a government source told Reuters on Tuesday.

“India is the world’s largest sugar producer and the second exporter behind Brazil.

Somewhere else, Chao Deng and Amira El-Fekki reported on the front page of today’s Wall Street Journal that, “Long the world’s High importer of wheat, Egypt was hammered by Russia’s invasion of Ukraine, which disrupted wheat supplies to both countries. The pair previously provided more than 80% Egyptian imports.

“In a country where political discontent often follows food price spikes, the risk of bread shortages is among the most urgent security challenges the Egyptian state had to face since the coup of 2013 which installed President Abdel Fattah Al Sisi in power.

“As a result, the government has cast a global net for new supplies of wheat from Paraguay to India. It also orders farmers nationwide to harvest wheat earlier than usual this year and aims to buy 57% more grain locally than the year before, according to a Wall Street Journal calculation based on official data.

Today’s Journal article noted that “Breadwhich the Egyptians call A’ish – Arabic for life – is part of a social contract in Egypt the government providing food, gasoline and electricity at affordable prices. Egyptians eat more bread than most people in the worldabout 330 pounds per year each on average, nearly triple the global figure.”

Egypt has few easy answers to get more wheat. About 98% of Egypt is desert and the problems of access to water are getting worse. Authorities have resisted calls to switch to grains such as sorghum or barley that require less water due to the overwhelming popularity of wheat“, says the Journal article.