{"id":7433,"date":"2022-04-11T19:39:35","date_gmt":"2022-04-11T19:39:35","guid":{"rendered":"http:\/\/commodityconversations.com\/wordpress2\/?p=7433"},"modified":"2022-04-11T19:39:35","modified_gmt":"2022-04-11T19:39:35","slug":"commodity-conversations-news-monitor-25","status":"publish","type":"post","link":"https:\/\/commodityconversations.com\/wordpress2\/2022\/04\/11\/commodity-conversations-news-monitor-25\/","title":{"rendered":"Commodity Conversations News Monitor"},"content":{"rendered":"

The UN FAO Food Price Index<\/a> averaged 159.3 points in March, up 12.6 per cent from February and the highest level since the inception of the index in 1990. The FAO said the war in Ukraine was primarily responsible for a 17.1 per cent rise in the price of grains, including wheat, oats, barley, and corn.<\/p>\n

The NY Times wonders whether a Reddit investment community board<\/a> and an ETF were behind those limit-up days in wheat. (Many in the trade think it unlikely.)<\/p>\n

The war in Ukraine makes it tough to predict<\/a> the country\u2019s grain harvests. UkrAgroConsult forecasts corn production at 19 mln mt, less than half last year\u2019s level. Barva Invest puts wheat production at 16.7 mln mt, about half last year. Maxigrain predicts sunflower output could fall 30 to 40 per cent below average. \u00a0APK-Inform estimates combined grains and oilseed output to halve to 53.3 mln mt, while the agribusiness Kernel Holding expects the country to produce a maximum of 60 mln mt.<\/p>\n

The USDA warns that US food prices<\/a>, already up 9 per cent on average for the year, will continue skyrocketing. The USDA marked down Ukraine\u2019s corn exports<\/a> by 4.5 mln mt to 23 mln mt and wheat exports by one mln mt. Ukraine’s railways are struggling with a backlog of grain wagons<\/a> on the country’s western border as traders look for alternative export routes. Bloomberg writes that the war is shifting global trade flows<\/a>. They show how in this short video<\/a>.<\/p>\n

In this photo essay<\/a>, the Guardian explains that the lack of Ukrainian wheat exports is a disaster for Egypt\u2019s poor. It is also a disaster in Afghanistan, already suffering its worst drought in 20 years<\/a>. Coupled with the fallout from the Taliban\u2019s takeover and the war with Ukraine, some 10 million Afghans \u2014 more than a quarter of the population \u2014 are near famine.<\/p>\n

Meanwhile, Russia boosted wheat shipments<\/a> by about 60 per cent in March, exporting about 1.7 mln mt, up from 1.1 mln mt shipped in March 2021. (March 2022 exports are still only about half of March 2020.)<\/p>\n

Consultancy StoneX estimates Brazil\u2019s planted wheat area<\/a> will reach 3.4 million hectares this season, up 20.6 per cent from the previous year, with production forecast at 10 million mt. The estimate compares with Conab\u2019s forecast of production at 7.9 million mt, up from last year\u2019s 7.6 million mt, with the planted area at 2.7 million mt.\u00a0\u00a0 Conab expects wheat exports to reach a record 3.5 million mt.<\/p>\n

The US winter wheat crop<\/a> has emerged from dormancy in a miserable condition following a dry winter in crucial production states. The USDA estimates that only 30 per cent of US winter wheat was in good or excellent condition as of 3rd<\/sup> April compared to 53 per cent at the same time last year.<\/p>\n

The USDA Secretary has said that quickly converting CRP (Conservation Reserve Program)<\/a> land into crop production is \u201cclearly unfeasible<\/a>.\u201d He added that \u201ca considerable proportion of currently enrolled CRP acres are in areas experiencing significant levels of drought. Even under non-drought scenarios\u2026 one acre coming out of CRP does not transfer into an acre of crop production, but closer to half that.\u201d<\/p>\n

The National Sunflower Association says that US farmers may plant twice as many additional acres<\/a> with sunflowers as the USDA forecast.<\/p>\n

Although India has harvested a record rapeseed-mustard crop, many farmers are holding back from selling<\/a> to oilseed processors, hoping prices will rally further. Slow farmer selling, coupled with falling supplies of sunflower oil from Ukraine, could force the country to increase palm and soy oil imports.<\/p>\n

DAP fertilizer prices tracked by DTN<\/a> are now at the highest level in DTN’s historical data set. The price for phosphorus fertilizer increased 17 per cent compared to a month ago at an average price of $1,033\/mt. The previous high was $984\/mt set in November 2008. Bloomberg warns that the global fertilizer shortage is imperilling rice production in Peru<\/a>, where the foodstuff is a staple for millions of people.<\/p>\n

China\u2019s farmers are under pressure, hit by the fertilizer shortage because of Covid lockdowns<\/a>. One farmer said it was the most challenging planting season he had experienced. Congestion at Chinese ports<\/a> (and elsewhere) is grid locking about 10 per cent of the global container-ship fleet.<\/p>\n

The FT writes that EU farmers are also under pressure<\/a> because of soaring fertilizer, feed and fuel costs. Swithun Still, a grain trader, told the newspaper, \u201cIt\u2019s the four F\u2019s \u2014 feed, fertilizer, fuel and financing,\u201d adding, \u201cThe war in Ukraine has had a huge knock-on effect for farmers.\u201d<\/p>\n

Even so, the European Commission forecasts EU grain exports<\/a> to rise by 14 per cent this year to 49 mln mt, including an additional 5.6 million mt of soft wheat. It expects total 2021\/22 EU cereal production to reach 293.3 mln mt, a 4.3 per cent increase year-on-year.<\/p>\n

Writing in the FT, an EU farmer argues that the agriculture sector must reinvent itself<\/a> in the face of high energy and fertilizer costs.<\/p>\n

In company news, Maersk is launching an airline<\/a>, building on Star Air, a Danish air cargo company it already owns. The new company will be called Maersk Air Cargo and will take over operations from Star Air and add new planes. Observers are asking what Maersk will invest in next<\/a>.<\/p>\n

Three more members of the Cargill family<\/a> have joined the ranks of the world\u2019s 500 wealthiest people thanks to their stakes in Cargill Inc. According to the Bloomberg Billionaires Index, each has a net worth of $5.3 billion, up 20 per cent this year.<\/p>\n

The Minneapolis Star Tribune finds that some big food and beverage companies have pushed up profit margins<\/a> and prices while others are just passing along the increased cost of doing business.<\/p>\n

In environmental news, the UN\u2019s climate science panel, the IPCC, warns that companies and individuals need to do much more to slash greenhouse gas emissions<\/a> from agriculture, farming, and forestry to slow down the pace of climate change. Meanwhile, Brazil has set a record for Amazon deforestation<\/a>. From January to March, deforestation in the Brazilian Amazon rose 64 per cent from a year ago to 941 sq km.<\/p>\n

Finally, if you have been wondering whether mushrooms talk to each other<\/a>, one scientist believes they do. They may have a vocabulary of around 50 words.<\/p>\n

\u00a9 Commodity Conversations \u00ae 2022<\/p>\n

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The UN FAO Food Price Index averaged 159.3 points in March, up 12.6 per cent from February and the highest level since the inception of the index in 1990. The FAO said the war in Ukraine was primarily responsible for a 17.1 per cent rise in the price of grains, including wheat, oats, barley, and … <\/p>\n

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