Dec 28, 2020

Russia Cuts Export Outlook

Country's wheat exports may be 36.3 MT for the 2020/21 crop year versus previous forecast at 40.8M

SovEcon Cuts Russia’s Export Outlook

  • The agency sees Russia’s wheat exports at 36.3 million tonnes for the 2020/21 crop year versus the previous forecast at 40.8 million.
  • The recent addition of the export tax was cited as the reason for the large cut to wheat exports.
  • The country continues to deal with rising food costs/inflation with the tax a recent measure taken to try and offset the rising costs.
  • SovEcon said it used the 2014/15 year as a model for what could happen this marketing year; that year, an export tax was imposed starting in February.
  • SovEcon also cited that farmers may postpone sales until the 2021 season in anticipation they will receive better prices once the tax expires.

FBN’s Take On What It Means: The cut to Russia’s wheat exports could be a bit extreme. Global prices still are strong and prices farmers would be receiving are solid too despite the tax. Plus, producers will need cash. While Russia’s exports may decline some from the previous expectations, we do not anticipate a 4.5 million tonne cut to exports. If that were to occur though, it would roll to the 2021 crop year.


Details About China’s November Soybean Imports

  • The country brought in 9.6 million tonnes of beans in November, up 16% versus last year.
  • Of that total, US beans accounted for 6 million tonnes versus 2.6 million in November 2019 and 3.4 million tonnes in October 2020.
  • Brazil beans made up the majority of the rest of November imports with that total coming in at 2.7 million tonnes versus 4.2 million in October.
  • Brazil’s shipments since January are 63 million tonnes, up 19% from 20 million last year; US bean shipments total 20 million tonnes, up from 14 from January-November 2019.
  • Crush margins in China were under pressure in November but have since improved.

FBN’s Take On What It Means: Brazil gained a larger footprint in China’s bean import programs the past couple of years but with Brazil’s balance sheet situation tight until new-crop harvest, the US is positioned to have a couple more months of strong export totals to China. Plus, China’s imports are expected to be higher overall thanks to recovering demand.

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Marketwatch: Jan, 18

US Corn Price Idx: ZCPAUS.CM

open: 5.7667
high: 5.8486
low: 5.7266
close: 5.8288

US Soybean Price Idx: ZSPAUS.CM

open: 13.366
high: 13.376
low: 13.2328
close: 13.2696

US Hard Red Winter Wheat Price Idx: KEPAUS.CM

open: 7.3061
high: 7.3384
low: 7.2334
close: 7.2454

US Soft Red Winter Wheat Price Idx: ZWPAUS.CM

open: 7.0114
high: 7.0566
low: 6.9566
close: 7.0014