Daily Market Wire 22 May 2023

The G7 summit concluded yesterday in Japan. Ukraine President Volodymyr Zelensky attended as a special guest and G7 leaders reaffirmed their support of Ukraine. The G7 will unveil new sanctions and export controls targeting Russia, “We will starve Russia of G7 technology, industrial equipment and services that support the war machine,” adding it has “dramatically reduced” reliance on Russia’s energy supplies and commodities. Britain said sanctions would include targeting companies connected to the theft of Ukrainian grain and those involved in the shipment of Russian energy. Meanwhile, G7 leaders said they “continue to support the export of Ukrainian agri-products.” President Biden has agreed to let Ukrainians be trained on the American-made 4-16 fighter jets after months of campaigning from Ukraine. He told allies that he is prepared to approve other countries’ transferring the jets to Ukraine 

Russia’s head of Wagner Group claimed victory in Bakhmut over the weekend, even though Ukraine says that it still holds a few blocks of the ruined city.

Ukraine’s port of Pivdennyi, the country’s largest, claims Russia is sabotaging its operations by not allowing inspections of inbound vessels. No vessels have been included on the list for inspections since April 29. Russia hasn’t explained why it’s rejecting Pivdennyi-bound ships, port officials said in a letter to Mr Zelenskiy. As a result, 1.5Mt of grains and sunflower oil bound for African countries and Asia, which have been at the port for two months, can’t be exported. There are 26 vessels awaiting access to Pivdennyi and the fleet’s losses exceed $50m, according to the letter.

According to the Saskatchewan Crop Report, for the week ending 15 May, 2023-24 plantings made significant progress over the past week, advancing to 38pc complete (33pc previous year, 53pc five-year avg), including spring wheat at 43pc, durum at 38pc, barley at 38pc, oats at 19pc, canola at 19pc. Recent rains helped improve soil moisture levels in dry southeastern areas, but hampered planting operations. Top soil moisture conditions were rated at 69pc adequate and 24pc short.
 

FranceAgriMer estimated 93pc of soft wheat was in good or excellent condition compared with 94pc the previous week and 73pc the previous year and is the highest for this time of year since 2011. Winter barley was at 90pc (92pc, 71pc) and spring barley at 95pc (95pc, 69pc). Maize plantings were 97pc complete (79pc previous week, 88pc previous year).

Agribusiness consultancy Safras & Mercado revised upward its Brazilian soybean production number by 0.58Mt to 155.66Mt, 21pc higher year on year reflecting a 5pc increase in area planted. 

Buenos Aires Grain Exchange reports that for the week ending 17 May 2022-23 maize harvest reached 25pc complete with conditions rated 47pc fair/excellent, with production maintained at 36.0Mt (52.0Mt previous year). Soybean harvest was 69pc complete, with conditions rated 44pc fair/excellent. Harvest in the centre was drawing to a close, with lower-than-expected yields reported, production forecast cut by 1.5Mt, to 21.0Mt (43.3Mt previous year)
 

Argentina’s Ag Ministry has pegged 2023-24 wheat planted area at 6.1m ha (5.9m ha previous year) and barley area pegged at 1.6m ha (1.8m ha). 

Local markets continued to remain steady leading into the weekend, with bids mixed again across the country. WA wheat remained largely unchanged with old crop ASW1 still trading around $370-385/t range through Albany and Esperance, Barley in WA also saw some late interest and traded around $295/t FIS in Kwinana Port Zone. Over in the East feed grains in the Northern part of the country still remain very firm, while things were unchanged in Port Kembla zone and Victorian wheat and barley prices were a touch softer through the delivered homes. Canola had a little bounce on old crop bids to finish the week off but liquidity remains quiet.

GIWA’s latest crop report released on Friday reports that seeding in WA will wind up for most growers by the end of next week. Historically this will be an early finish and is a reflection of the early rains in March and the reduction in area sown in the dry areas. The hesitancy to not over-commit on the back of a couple of good years, has been reflected in the reduction in area of lupins, beans and chickpeas, and the higher risk crops such as canola (area down 18pc) being substituted to wheat or left out to pasture or fallow. As a result, the total cropped area is likely to be back around 8pc at the 8.2 to 8.3 million hectare mark. This could increase slightly if more rain falls over the next few weeks.