Bull run continues into 2022/23

The Black Sea region is vital to global wheat supply, hence the market reaction to the current situation. Between Russia and Ukraine, they account for 29% of global exports.

In Ukraine, over 73% (23.5Mt) of their 2021/22 wheat crop (32.0Mt) was expected to be exported (UkrAgroConsult). That equates to 12% of global wheat exports (USDA). According to UkrAgroConsult data, Jul-Feb 21st wheat exports total 18.5Mt. Ukrainian ports are currently closed, and Ukraine’s Maritime Administration said they will remain closed until the Russian invasion ends. Therefore, whether the final 5.0Mt will be exported is under question.

This will directly affect Indonesia and Egypt, the top 2 buyers of Ukrainian wheat. However, they will now be looking to source wheat from elsewhere when global stocks are already tight.

2022/23 wheat crop concerns​

The Ukrainian State Statistics Service’s winter wheat plantings forecast is 6.54Mha, down 5.3% year-on-year. Although historically they have often underestimated plantings in February versus final estimates, these were made pre-invasion. This means they may not be revised up like they usually are. The winter crop makes up most of the Ukraine’s wheat area, so planting of the spring crop is less of a concern but maximising winter crop potential is.

The map below shows where wheat is grown throughout Ukraine. Whilst Russian invasions are targeting cities, the knock-on effect is currently unquantifiable.

Ukrainian wheat production map by region

There could be limitations to fieldwork. Rightly so, farmers may well have bigger priorities. Availability of inputs (namely fuel and fertiliser) is also under question. Not only availability but cost too, which could impact farmers decisions. Therefore, crop potential could be hampered.

UkrAgroConsult estimated 2022/23 wheat production at 28.30Mt, already 11.6% down year-on-year (Feb-22, pre-invasion). Minimal inputs could knock yields back significantly. The table below demonstrates what differences could be seen in Ukrainian wheat production and therefore global supply in 2022/23. If only the winter wheat area (estimated by the State Statistics Service) makes it to harvest, and yields drop to 2020/21 levels, production would be cut by 4Mt.

Table displaying Ukrainian wheat production scenario's

What does this mean for the UK?​

Linking back to the start, the Black Sea region is vital to global wheat supply, which will have a ripple effect. Yesterday, new-crop UK wheat futures (Nov-22) closed at £229.00/t, the highest close price ever for this contract. This morning, it has gained more ground, trading as high as £238.00/t (12.30pm).

If there is ongoing disruption in the Black Sea region it will inevitably continue to support UK prices into the new marketing year (2022/23).

Today's Grain Market Daily on our website: Bull run continues into 2022/23

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HSENI names new farm safety champions

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Written by William Kellett from Agriland

The Health and Safety Executive for Northern Ireland (HSENI) alongside the Farm Safety Partnership (FSP), has named new farm safety champions and commended the outstanding work on farm safety that has been carried out in the farming community in the last 20 years.

Two of these champions are Malcom Downey, retired principal inspector for the Agri/Food team in HSENI and Harry Sinclair, current chair of the Farm Safety Partnership and former president of the Ulster Farmers’ Union (UFU).

Improving farm safety is the key aim of HSENI’s and the FSP’s work and...