Russian wheat markets in a crazy 2017/18, and prospects for 2018/19

Transcription

1 Dmitri Rylko General director IKAR LLC Russian wheat markets in a crazy 2017/18, and prospects for 2018/19 TUSAF, March 10, 2018

2 IKAR It s not only about Russia and not only about wheat RUK and Russia on the world grain markets

3 IKAR Russian volume/share on the world wheat market In 2017/18 Russia has finally arrived to the place of biggest world wheat exporter

4 FOB, CPT an exchange rate correlafon Due to growing export volumes and farm consolidaqon, South Russian farmers have become type of price makers on the world wheat market

5 Wheat yields per key exporfng nafons, tons/ha

6 Our (IKAR) virtual struggle with the USDA on the Russian wheat export figures Jun Jul Aug Sep Oct Nov Dec Jan Feb Mar USDA 29,0 30,5 31,5 32,5 32,5 33,0 33,5 35,0 36,0 37,5 IKAR 29,0 31,0 32,0 33,0 34,0 34,0 36,0 36,5 37,5 38,1

7 Monthly Russian all grains export dynamics, TMT Monthly Russian wheat export dynamics, TMT

8 27,6 38,1 38,1

9 What happens with Russia? Why grain/wheat producqon and export records? How sustainable is the story? Weather DevaluaQon FerQlizers/agrichemicals Government Farm management Infrastructure

10 Wheat outputs per key producqon regions, MMT 10

11 What happens with Russia? Why grain/wheat producqon and export records? How sustainable is the story? Weather DevaluaQon FerQlizers/agrichemicals Government Farm management Infrastructure

12 Exchange rate remains supporfve Ruble and brent in dollars 57 36

13 Ruble appreciated, but Euro even more

14 Winter/spring kill of winter crops ExcepQonally mild winters? Three out of four most recent seasons are featured with excepqonally mild winters and very modest winter kill

15 Russian pre- export railway transportaqon is record strong

16 Russian grains exports per main channels, July- February, TMT

17 The insights on the Azov- Don grains export shipments Anchor transshipping Anchor transshipping in Black Sea has become a vital for keeping alive Azov Sea terminals 2017/18: Open Sea transshipping has been under an administraqve pressure of port authoriqes

18 Azov Black Sea anchor transshipping

19 Black and Azov Sea export terminal 12.5% wheat export terminal Close to historical record high Spread (right axis) NOVO AZOV In the middle of the season Azov Sea CPT/FOB values were pressurized by informal prohibiqon of OPL transshipments and big demand on coal transportaqon

20 Russian wheat export desfnafons Jul- Feb

21 Russian wheat export desfnafons Jul- Feb Georgia 526, Tanzania 485, Oman 284, Korea 274, Mozambique 258, Venezuela 223, Ghana 195, Uganda 194, Philippines 174, etc.

22 The dynamics of the Russian wheat quality, TMT (~13%+) ~11-12.% ~10.5%< Source: IKAR based on the Center of grain quality assessment

23 Wheat exports per classes, ТМТ «condiqonal milling» or feed 23

24 Wheat exports per classes, % 24

25 Russia export desfnafons

26 Russia export desfnafons

27 IKAR Russian wheat export to Turkey per classes: dramaqc shiqs of 2017/18 ~13%+ ~11-13% ~<10.5% F U L L S E A S O N S JUL- JAN 2017/18

28 IKAR Russian wheat export to Turkey per classes: dramaqc shiqs of 2017/18 ~13%+ ~11-13% ~<10.5% JUL- JAN 2017/18 WHY IS THE SHIFT? South Russian wheat quality structure: probably too wide protein price spreads South Russian W and shiq to import of hi- pro from BalQcs countries Probable shiq of wheat flour demand to lower priced flours

29 Wheat product markets

30 Wheat flour export, TMT Russia Ukraine Unlike Russia, Ukraine is strongly moving forward with its wheat flour exports

31 The break- downs of countries wheat flour exports (2017/18 Jul.- Jan.) Ukraine TMT Kazakhstan TMT Russia TMT Kazakhstan ships to its Central Asia belli Ukraine is most diversified with a focus on China and Africa Russia is focused on Fmr. USSR and made a break- through into China

32 Wheat bran export, TMT Russia Ukraine Turkey is a key buyer of wheat for both Russia and Ukraine

33 Flour and bran export dynamics, TMT

34 Could Russia export more bran? The esfmated share of export in wheat bran output, TMT

35 New season contours

36 State of winter wheat: so far, so good

37

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39 All grains producqon balances, TMT 2018/19 All grains, MMT 2015/ / / / / /19 Beginning stocks 15,0 13,2 19,0 26,2 26,2 26,2 Gross output 104,8 120,7 135,1 110,0 120,0 130,0 Import 1,0 1,0 1,0 1,0 1,0 1,0 Resources, total 120,8 134,8 155,1 137,2 147,2 157,2 DomesQc disappearance 72,0 79,0 80,3 77,0 78,0 81,0 To export 35,6 36,9 49,6 42,5 45,0 50,0 Total disappearance 107,6 115,9 128,9 119,5 123,0 131,0 Carry- overs 13,2 19,0 26,2 17,7 24,2 26,2 39

40 Wheat balance, 2018/19, MMT Wheat, MMT 2015/ / / / / /19 Beginning stocks 7,9 8,4 13,0 18,2 18,2 18,2 Gross output 61,8 73,3 85,8 68,0 73,0 82,0 Import 0,7 0,7 0,7 0,7 0,7 0,7 Resources 70,4 82,4 99,5 86,9 91,9 100,9 DomesQc disappearance 36,9 42,0 43,8 43,8 43,8 43,8 To export 25,2 27,4 37,5 29,0 32,0 38,0 Total disappearance 62,1 69,4 81,3 72,8 75,8 81,8 Carry- overs 8,4 13,0 18,2 14,1 16,1 19,1 In 2018/19 Russia has chances to repeat its 2017/18 export story 40

41 Thank you! Teseccurler! Skype: Dimash457 Russian Weekly Grain and Middle of Week Reports Russian Weekly Oilseeds and products Russian grains/oilseeds export data