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Articles of Interest- Thursday, July 18, 2019

Articles of Interest- Thursday, July 18, 2019

Russia Unveils Draft Strategy to Build Out Grain Sector

World Grain – 07/17/2019

The Ministry of Agriculture of the Russian Federation has put forth a long-term strategy that could ramp up investment in the country’s grain sector by investing billions of dollars in infrastructure and logistics. The plan, which would cost more than 4.4 trillion rubles ($70 billion), would draw on funds from private investors, loans and targeted financing. According to the Agriculture Ministry, Russia’s baseline scenario for its grain crop is 140 million tonnes by 2035, with the possibility of production rising as high as 150.3 million tonnes. The higher output totals would allow Russia to potentially export as much as 63.6 million tonnes by 2035, the agency said. By comparison, Russia’s grain crop in 2019-20 is forecast at 118 million tonnes, with exports at 45 million tonnes. “Intensification of grain production will be carried out by preserving and increasing soil fertility by making the necessary amount of mineral and organic fertilizers, as well as taking measures for chemical reclamation (liming, phosphorizing and gypsum), and preventing wind and water erosion,” the Agriculture Ministry said. “Particular attention will be paid to changing the structure of the produced grain — it is planned to increase the volume and stability of the production of hard and soft wheat with high indicators of characteristics (primarily protein content),

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Attention Shifts to New Crop Australian Wheat as Old Crop Demand Fades

S&P Global – 07/18/2019

Flour millers in South Korea have booked their first new crop wheat cargo from Australia, three months ahead of the start of harvest, attracted by the current price level, market sources said. The buying group of flour mills in Pyeongtaek bought a combo cargo comprising 34,000 mt of Korean noodle blend KASW at $231/mt CFR and 6,000 mt of Australian hard wheat with 11.5% protein AH2 at $235/mt CFR Pyeongtaek for November shipment last Friday, traders said this week. The price spread between old crop and new crop has narrowed to close to parity as demand for old crop has weakened from buyers in Asia who are focused instead on buying cheaper Black Sea new crop wheat. Competition from the Black Sea in international markets, coupled with recent favorable weather in Western Australia, has been increasingly exerting downward pressure on Australian wheat prices. S&P Global Platts assessed Australian Premium White wheat at $234.50/mt FOB Kwinana Wednesday, down $10/mt from May 30. Two more combo vessels of 50,000 mt were also booked by a South Korean buying group in Incheon last week, market sources said.

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Japanese Official Says Negotiators Working Hard on US- Japan Trade Deal

Reuters – 07/17/2019

U.S. and Japanese officials are working hard to reach agreement on a bilateral trade agreement, a senior Japanese official told Reuters on Wednesday, adding he was looking forward to news on the deal in the near future. Three industry sources told Reuters on Tuesday that the United States and Japan were working on a small trade deal involving agriculture and autos that could be agreed by President Donald Trump and Prime Minister Shinzo Abe when they meet in New York in September.
Asked about progress in the bilateral trade talks, Koji Tomita, Japan’s sherpa to the Group of 20 industrialized countries (G20), said, “When President Trump came to Japan at the end of May, he was talking about doing a deal as soon as possible. Our team is now working pretty hard, so we are looking forward to some news in the near future.”

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Crop Progress Report July 16, 2019

North Dakota Wheat Commission – 07/16/2019

The U.S. hard red spring wheat crop held steady in its overall condition rating as of mid-July with 76 percent rated good to excellent, compared to 78 percent the previous week and 80 percent a year ago.  Ratings remain the highest in Minnesota and North Dakota with 85 and 80 percent rated good to excellent, respectively.  In Montana, the crop is rated 67 percent good to excellent, and 74 percent in South Dakota.  Recent rains have benefitted the crop in many areas, but have also amped up disease pressures.  Producers remain vigilant in monitoring disease threats, as well as some pockets of moderate levels of wheat midge and cereal aphids. Development of the crop remains behind normal in all states with the exception of Minnesota.  The overall U.S. crop was 78 percent headed as of July 14, behind the five-year average of 87 percent and the 2018 pace of 91 percent.  In Minnesota, 96 percent of the crop was headed, slightly ahead of the average of 91 percent for mid-July.  North Dakota has 79 percent headed, South Dakota 75 percent and Montana 60 percent.  A recent stretch of hot temperatures, upper 80’s to lower 90’s, helped accelerate crop maturity some, which should be reflected in next week’s report.

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2019 Wheat Harvest Wraps Up

Great Bend Tribune – 07/17/2019

Barton County farmers are putting the cold and rainy spring behind them as temperatures begin to rise. Pivots are coming to life around the county, and it’s just about time to close the book on this 2019 wheat harvest.  This was one of the latest harvests on record, with harvest starting for most in the state around July 1. In the past two weeks, some areas received several inches of rain while others were passed over, while other areas saw varying degrees of hail. Mud kept farmers out of some fields, while others found ideal harvest conditions.  “I would say the bushels were about average if you were not flooded out,” said Alicia Boor, the agricultural agent for Cottonwood Extension District. “Protein was down a little from other years. Overall though, I feel that producers were pleased considering how difficult the growing conditions were.” Barton County farmer Keith Miller farms in different parts of the county, so he’s experienced both the good and the bad a wet spring and rainy harvest season had to offer.

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Source: U.S. Wheat Associates