USDA: war-related corrections to grain supply in FY 2021/22 The US Department of Agriculture (USDA) has made some corrections due to the Ukraine war in its April 2022 edition of the World Grain Harvest 2021/22. Global production is rated slightly higher than the previous month at 2,280 million t. The decisive factor was the higher wheat harvest in Argentina, which is currently estimated at 21 million t. Global consumption is estimated to be 2,284 million t higher, due to over-consumption in India and Southeast Asia. Stocks were slightly increased at around 608 million t, which was partly due to the unwanted stock build-up in the Ukraine. The supply figure remained unchanged at 26.6% of the end stock (previous year: 27.1%) for consumption, without China it was down to 14.1%.In purely arithmetical terms, the tight supply situation that has persisted for several years has not changed significantly, but the assessment of security of supply has become considerably more unfavorable against the background of the low expectations for the coming harvest. In global world trade , the quantities were reduced again by 6 million t to 465 million t compared to the previous month. In the case of Ukraine exports , a further decline of 5 million t is predicted, with a focus on corn; For Russia , the USDA estimates additional export reductions of 2 million t of wheat compared to the previous month. In a year-on-year comparison, export volumes remain manageable with a decline of 4%. For the EU-27 one expects around 3.5 million . t lower wheat exports than still assumed in the Mar 22 estimate. On the import side , the critical supply situation in North African and Middle Eastern countries is confirmed.In this case, too, the assessment against the background of the coming period is much more dramatic. When assessing future market and price developments in the grain sector, the unfavorable prospects for the coming 2022/23 marketing year are becoming more and more important. The USDA will make an initial assessment in its May issue . Not only do the war-related influences in Ukraine and Russia play a role; The global restrictions in the fields of fertilisers, crop protection and energy could make things more difficult with regard to yields per hectare. The spring work in the Ukraine is running on the back burner due to a lack of workers and equipment. Only in the west and center is work still being done on the Ukrainian fields. Initial estimates assume that the average harvest will be halved, which is just enough for self-sufficiency. Exports are hardly possible due to the destroyed port facilities.As a temporary measure, rail transport will be activated more, but in comparatively manageable quantities. Difficult detours via the ports in Moldova and Romania are on the agenda. Russia , too, will not get away without restrictions in the grain sector. While fuel and fertilizer supplies are not a major problem, there is a lack of crop protection products sourced from the west . Import restrictions in some countries are causing a reduction in the usual Russian deliveries. But Egypt , in its supply shortage (around 1 million t import requirement per month), has already bought inexpensive Russian wheat again. The USDA report initially caused a sharp rise in prices on the stock exchanges . In Chicago wheat is currently trading above 350 €/t again, while in Paris Sep. 22 prices have risen to 375 €/t. In the case of corn, US prices have risen slightly to €275/t.The Paris Stock Exchange is currently trading rising €325/t corn. The subsequent dates until autumn 2022 indicate lower prices, but remain above the range of 250 to 300 €/t. The assessment of the market and price development cannot be explained by previous empirical values, but mainly by the tense expectations of the coming supply period(s).
