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Articles of Interest- Thursday, August 8, 2019

Articles of Interest- Thursday, August 8, 2019

Russian Wheat Prices Pressured by Forecasts of Strong European Harvest

Hellenic Shipping News – 08/07/2019

Russian wheat export prices remained under pressure last week by competition from other exporters amid strong forecasts for the European harvest as well as a weak rouble, analysts said. Black Sea prices for wheat with 12.5% protein content fell $2 to $195 a tonne free on board (FOB) by the end of last week, Russian agricultural consultancy SovEcon said. IKAR, another Moscow-based consultancy, also quoted FOB wheat at $195 a tonne. IKAR said earlier on Monday it had cut its 2019 domestic wheat crop forecast to 75.5 million tonnes from 76.4 million tonnes. “(The European) crop looks good, (while) Russian wheat crop issues are not big enough to impress the market,” SovEcon said. “The falling rouble may have been the only good news for exporters” last week, it added. Russia has exported 3.88 million tonnes of grain since the start of the 2019/20 season, 17% less than during the same period the previous year, SovEcon said, citing data from Russian port authorities. That figure included 3.04 million tonnes of wheat.

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Saudi Opens Door to Black Sea Grain with Pest Rule Change as Tightens Russian Ties

Reueters – 08/08/2019

Saudi Arabia will relax its bug-damage specifications for wheat imports from its next tender onwards, it told Reuters on Thursday, opening the door to Black Sea imports and strengthening ties with Russia beyond energy cooperation. Russia has long sought access to Saudi Arabia’s wheat market as Moscow tries to take further market share in Middle Eastern and North African wheat markets from the European Union and United States. Wheat from the Black Sea did not previously meet Saudi specifications for zero-pest damage, but the governor of state grain buyer SAGO, Ahmad al-Fares, told Reuters that the specifications will be relaxed to 0.5% from the next tender. Saudi Arabia had been one of the last Middle East markets not dominated by Black Sea wheat and Euronext wheat futures fell in opening trade after the news, but later steadied as Chicago prices turned higher. The change has wider implications as Riyadh, which regards the United States as its most important ally, moves closer to Moscow, with Russian President Vladimir Putin due to visit Saudi Arabia in October.

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Argentina Expected to Harvest Record Wheat Crops

World Grain – 08/08/2019

Wheat production in Argentina in 2019-20 is forecast at a record 20.8 million tonnes, according to an Aug. 7 Global Agricultural Information Network (GAIN) report from the U.S. Department of Agriculture (USDA). The USDA said planted area for this marketing year has grown by 200,000 hectares to 6.4 million hectares. Planting is nearing 95% complete despite some areas struggling to complete planting due to wet conditions. “Sufficient ground moisture from winter has the crop in good condition,” the USDA said. “Due to 2018-19 strong returns, producers are expected to increase inputs and technology to drive higher productivity in 2019-20.” The USDA said it is expecting an average yield of 3.25 tonnes per hectare, which is higher than the average yield of the past 5 to 10 years. Given larger wheat production forecasts for 2019-20, exports may grow to a record 14.3 million tonnes (including flour that is calculated as wheat equivalent), the USDA said. “Larger global supplies over last year, when some principal exporters had production issues, may see domestic prices trending lower in the future,” the USDA said. “However, analysts are watching Australia’s dry weather and Brazil frosts for impacts on the market.

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USDA Plans to Ease Biotech Regs Splits Industry

Agri-Pulse – 08/07/2019

Crop developers say USDA’s effort to streamline its regulation of biotech crops will still slow the commercialization of many gene-edited products, but groups representing grain traders, food processors and restaurant chains are slamming the department’s proposal, claiming it could lead to trade disruptions and undermine consumer confidence. Under the proposed rule issued in June, bioengineered plants would be exempted from regulation by USDA if the modifications could be produced through traditional breeding techniques, making them unlikely to pose a greater plant pest risk than conventionally bred crops.  Crop developers would have three options under the proposed rule: They would be allowed to decide on their own whether their modifications are exempt from regulation; Companies could seek confirmation letters from USDA of the exempt status; Or they could ask USDA to determine whether the trait is regulated or not. The National Grain and Feed Association, Corn Refiners Association, National Oilseed Processors Association, North American Export Grain Association and North American Millers Association said in a joint statement to USDA that the proposal is “fundamentally flawed and is inconsistent with the agency’s obligation to protect the economic value of U.S. agricultural and food exports.”

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Impact of Trade Wars Escalation Unclear

Capital Press – 08/07/2019

On Monday, China’s Ministry of Commerce announced Chinese companies would stop buying U.S. agriculture products. The announcement came in response to the Trump administration’s decision last week to impose additional tariffs on Chinese goods and to designate China as a currency manipulator. The tit-for-tat announcements are the latest development in an ongoing trade war between the two countries. Sources say the wording of the ministry’s announcement was vague, implying the ban extends to all purchases of U.S. products. But, they say, it appears the announcement only applies to China’s state-operated industries and that sales to private importers are not impacted…“Any time that there is a ‘ban’ on something, it affects the movement of trade,” said Mike Miller, Washington Grain Commission member and Ritzville, Wash., wheat farmer. “Anytime you’re not able to ship something, it’s going to impact supply.”

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Source: U.S. Wheat Associates