Grain and oil crops market, September, 10-14

Grain crops

Prices of supply of food wheat became stable last week. Supply of wheat at low prices went down in the market. Many owners of wheat who wanted to sell it as soon as possible had to cut the price. Purchase prices of food wheat went down last week.

In the course of time situation in the market of flour makes more and more pressure on grain market. In order to keep profitability milling companies have to decrease purchase prices for raw materials – down to 550 UAH/MT for wheat of class 3 on CPT condition.

Prospects of further decrease of purchase prices for grain are negative. Difference in prices of demand and supply for grain of class 3 has already reached 70 UAH/MT. This proves not the fact that purchase prices are too low but the fact that owners of grain has opportunity to keep prices too high.

Now supply is relatively low (in comparison with gross production) and this phenomenon gives to owners of wheat hope for price increase. They believe it can happen by the beginning of November.

Prices of forage barley and wheat are stable and supply of forage crops (especially from grain elevators) has become lower. Price prospects depend upon timing of export shipments. But considerable increase of prices can hardly be expected. Even relatively small growth of prices will bring additional lots of grain into the market and price situation is hardly to change in the nearest future.

In the course of harvesting of maize prices of this crop go down – supply starting from 300 UAH/MT. At this price maize is proposed from fields directly of from threshing sites. Maize from grain elevators is sold not cheaper than 450-480 UAH/MT.

Oil-bearing crops

During next weeks prices of sunflower seed will depend mainly upon how quickly harvesting will go on. Price-cutting is expected as harvesting becomes more active. However other producers of sunflower-seed oil who propose higher price dominate market. Last week this category of processing companies increased purchase prices additionally trying to make a good stock for beginning of work in new marketing year.

Oil-mills buy small lots of sunflower seed at relatively high prices. They are oriented at the market of high prices of retail sales of sunflower-seed oil.

These factors will favor to moderate increase of prices for sunflower seed within 2-3 weeks. The prices may become stable (or decrease slightly) under influence of the following factors:

1. Increase of supply of sunflower seed.

2. Stock big enough for most of enterprises to start processing.

3. Price-cutting of domestic prices for sunflower-seed oil and necessity to look for
opportunities for export of sunflower-seed oil at medium prices.

Price-cutting of sunflower-seed oil is not fast – domestic market has just started to satiate. But this price-cutting will become slower again just after prices will approach the level that guarantees profitability.

Oilcake with protein content can be sold now at the price higher than 105 USD/MT on condition DAF. In the course of time prices will shift to 100-105 USD/MT on DAF condition but hardly will they be lower taking into consideration possible support from purchase prices in ports.
by information of APK-Inform
www.apk-inform.com.ua