Issue #101, May 31, 2016

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Grain Digest Only the most important information about Black Sea grain

[Weekly Edition]

ContentGeneral Grains News- Ukrainian market- Russian market- World market

Grains- Wheat: news- Barley: news- Corn: news

Oilseeds- Rapeseed: news- Sunflower: news- Soybeans, soybean meal/oil : news

Ukrainian market

Ukraine. Spring sowing campaign is 96% completeAs of May 23, spring grains and pulses had been sown at 7014 Th ha or 96% of the intended area (7367 Th ha), compared with 6638 Th ha by the date last year. Corn had been sown at 4286 Th ha (95%) against 4142 Th ha in 2015, buckwheat – 111 Th ha (86%) against 106 Th ha in 2015, millet – 70 Th ha (58%) compared to 80 Th ha last year, rice – 11 Th ha (94%), sorgum – 48 Th ha (59%).

Ukraine: export potential of grains to exceed 39.8 mln tonnesIn 2015/16 MY, the export potential of Ukrainian grains is estimated at 39.87 mln tonnes, including 15.16 mln tonnes of wheat, 4.3 mln tonnes of barley, and 19.5 mln tonnes of corn. Since the beginning of 2015/16 MY and as of May 1, Ukraine supplied 34.616 mln tonnes of grains on foreign markets. In particular, the export volumes of wheat reached 14.6 mln tonnes, barley – 4.25 mln tonnes, corn – 15.48 mln tonnes, oats – 38 thsd tonnes, rye – 14 thsd tonnes, rice – 1 thsd tonnes, and other grains – 225 thsd tonnes.

In the current MY, key countries-importers of Ukrainian grains reduced purchasesAnalysis of the export geography of basic grains from Ukraine in 2016/17 MY demonstrates that such traditional countries-partners as Egypt and Saudi Arabia reduced the imports of Ukrainian barley by 19% (to 2.3 mln tonnes in July-April of the current MY). In addition, Egypt reduced the imports of corn from Ukraine by 36%, to 1.6 mln tonnes. At the same time, there is an urgent need to strengthen the position of Ukraine on the conquered markets of Asia, and expanding of the range of supplied grain varieties. For example, China, which became the key partner of Ukraine in corn purchases, plans to import 1 mln tonnes of the grain only in 2016/17 MY. While the import volumes of barley will reach 6 mln tonnes, sorghum - 5 mln tonnes, wheat - 3.2 mln tonnes.Ukraine also needs to develop its relations with Japan, which annually imports 14.5 mln tonnes of corn and 5.7 mln tonnes of wheat.

Ukraine: impact of the grain market on freight policy of shipowners on the Danube riverThe grain market significantly determines the freight policy of shipowners on the Danube river. Grain crops became the major cargo transported by the Danube river. At the same time, the vessels under the Ukrainian flag can not visit the Romanian ports, because there is a ban for all vessels, except those that are under the Romanian flag or flag of the European Union

Ukraine. Flour production increased in AprilIn April 2016 Ukrainian flour production reached 164.3 KMT against 161.9 KMT in April 2015. Month over month wheat flour production increased by 3.6% to 154.7 KMT. Since the beginning of 2016 flour production is 3.7% behind the volume produced during the same period last year. During January-April Ukraine produced 624.4 KMT of flour. Along with this, bread production lowered by 3.5% to 372.7 KMT over the reporting period. Wheat bread production decreased by 6% to 157.9 KMT, and rye bread – by 18% to 3.4 KMT.

Ukraine. Domestic oilseed prices increased last weekLast week domestic oilseed prices went up. This is a seasonal tendency, as all oilseed stocks have decreased and prices strengthened on the world market. During the week domestic sunflower seed prices grew on average by UAH 150/MT. Export oilseeds prices also increased. FOB Black Sea seller prices for sunflower seed gained USD 5/MT and reached USD 445/MT. Meanwhile, export sunflower oil prices dropped by USD 10/MT last week.

Ukrainian hydrometeorological center forecasted the harvest of winter grains at 26.5 mln According to preliminary estimations, in 2016 Ukraine will harvest nearly 26.5 mln tonnes of winter grains, as opposed to 29.6 mln tonnes last year. Taking into account the current condition of crop areas, the available reserves of productive moisture content in the soil, and the expected weather conditions, in accordance with the agrometeorological calculations, in the current year the yield of winter wheat is expected at the level of 3.96 t/ha, winter rye – 2.48 t/ha, barley – 3.25 t/ha, the forecast said. Also, it is noted that in 2016, ripening of winter crops will take place in 1-2 weeks earlier than the standard terms, due to very early spring processes.

Russian marketIn 2016, Russia to harvest 106 mln tonnes of grainsThe Minister of Agriculture of Russia increased its forecast for the general grain production in the country to 106 mln tonnes, against the previous forecast at 104 mln tonnes. In the nearest ten years the index should reach 120-130 mln tonnes. At the same time, the growth of yield indices is the main reserve for increasing of grain production volumes. Such result can be achieved through the use of new agricultural machinery, training of personnel, improvement of soil fertility due to fertilizers, etc.

In May, Russia to export 1.8 mln tonnes of grainsthe estimates for Russian grain exports in May 2016 to 1.8 mln tonnes, against the previous forecast of 1.5 mln tonnes. The continued active shipments of wheat contributed to the reporting growth of export estimations.According to I.Pavensky, previously such high export rates were observed in May 2010, when Russia exported 1.76 mln tonnes of grains. So, Russia started demonstrating the record monthly volumes of grain shipments since February 2016. In particular, the exports of Russian wheat will reach 1.2 mln tonnes, barley - 120 thsd tonnes, and corn - 440 thsd tonnes. In June, the exports will fall to 1.2 mln tonnes, including 700 thsd tonnes of wheat. Also, Rusagrotrans raised the forecast of the general Russian grain exports in 2015/16 MY from previously expected 33.9 mln tonnes, to 34.18 mln tonnes (excluding pulses and flour in grain equivalent). In particular, in the current season the export volumes of wheat will reach 24.6 mln tonnes, barley - 4.4 mln tonnes, and corn - 4.8 mln tonnes. In addition, Russia will ship 980 thsd tonnes of peas and chickpeas, and nearly 290 thsd tonnes of flour in grain equivalent on foreign markets. Taking into account the reporting volumes, the general export volumes of grains and pulses will reach 35.5 mln tonnes.

Russia exported over 32.2 mln tonnes of grainsSince the beginning of 2015/16 MY (July 1) and as of May 25, the volume of grain exports from Russia totaled 32.28 mln tonnes, an increase of 12.3% compared with the same period last season (28.752 mln tonnes). The wheat volumes formed 23.367 mln tonnes from the reporting export volumes, barley – 4.207 mln tonnes, corn – 4.394 mln tonnes, and other grains – 312 thsd tonnes.

Volume of Russia-Greece trade down 16% in 2016In January-March volume of trade between Russia and Greece declined by 16%, thus, Russia moved to third place from the position of the largest trading partner of Greece The volume of trade between Russia and Greece fell by 16% in January-March 2016. During the working visit of the Russian President Vladimir Putin to Greece the parties intend to discuss trade and economic partnership between the two countries, as under the influence of external factors volume of trade between Russia and Greece have been declining. Thus, in 2015 the trade turnover between Russia and Greece amounted to $2.75 bln, which is 34% lower than in 2014. The decrease in volume of trade between the two countries was influenced by including currency fluctuations and decline in commodity prices, as 85% of Russian exports to Greece accounts for oil and natural gas.

Russia planted spring grains throughout 26.1 mln haAs of May 26, Russian agrarians planted spring crops throughout the areas of 42.2 mln ha, or 80.3% of the forecast (52.6 mln ha), which significantly exceeded the index on the same date last year (39.7 mln ha). At the same time, the planted areas under spring grains reached 26.1 mln ha, or 84%, as opposed to 23.9 mln ha on the same date in 2015, declared the Ministry of Agriculture of the Russian Federation. In particular, agrarians planted spring wheat throughout the areas of 11.5 mln ha (87.1% of the forecast), spring barley — 6.9 mln ha (85.1%), corn for grain – 2.5 mln ha (83.8%), and rice – 171.5 thsd ha (84.2%). Also, Russia planted sunflower seed throughout 6 mln ha (86.3%), spring rapeseed — 746.2 thsd ha (81.5%), soybeans – over 1.2 mln ha (56%), and flaxseed — 41.2 thsd ha (79.8%).

World marketKazakhstan's grain exports rise 30%Kazakhstan's exported 7.6mn tonnes of grain and flour in grain equivalent between July 1, 2015 and May 26, 2016, the Kazakh government said on May 26 citing data from the agriculture ministry. For comparison, exports totalled 5.86mn tonnes in the same period of the previous marketing year. Grain is a top agricultural export item for Kazakhstan, which exports grain mainly to neighbouring Central Asia states, Iran, Turkey, China and the Caucasus. The increase in exports was driven by better harvest and depreciation of the tenge, which increased competitiveness of Kazakh grain. Last year, Kazakhstan harvested 18.7mn tonnes of grain in clean weight, up from 17.2mn tonnes in 2014. Grain exports totalled 4.9mn tonnes, while flour exports stood at 1.8mn tonnes, the ministry said. This year's target for grain exports has been met at 92.5% so far. The agriculture ministry expects grain exports to exceed 8mn tonnes in the current marketing year that ends in June, up from 6.44mn tonnes a year before. In the 2013-2014 marketing year, Kazakhstan exported 8.68mn tonnes of grain.

Bulgaria increased grain exportsAt the end of the current season Bulgarian wheat and corn exports improved, notably primary to EU extra community destinations. By the end of the season wheat exports from Bulgaria may exceed 3 MMT. Corn exports also improved, but are still far behind the pace of 2014/15 MY. Domestic corn prices continued to rise last week. Prices were supported by further strengthening in the world market, as well as recovery of trading activity in Bulgarian domestic market.

Global grain and oilseed trade saw 50% growthGlobal trade of all grains & oilseeds has grown by about 150 million tonnes in the last five years, exceeding the growth of the previous five years by more than 50%. However, given the significant decline in prices, the value of these flows has dropped by more than 15% in the same period, to nearly USD200 billion in 2014/15

Belarus will decrease buckwheat sowing area by 50%Conditions for germination and further development of thermophyte crops, especially corn, slightly worsened due to cool weather. Slight frosts were noted in some places at night on the soil surface and near the soil surface (2 cm height). Frosts don't reach hazardous criteria, but reduce development pace of thermophyte crops. According to recent data sprouts were observed at the most corn fields. 3rd leaf emerged on April crops in the southern part of the republic. Germination stage was observed on the fields planted after May 10. The upper 10-cm layer of soil was moderately moistened. However, in some regions slight moistening of topsoil was observed due to uneven distribution of precipitation that also complicates sprouts emergence. In the last decade of May the sum of effective temperatures of the crops is going to be improved by expected increase in temperatures. As of May 23 buckwheat had been seeded at 10 Th ha or 64.1% of the intended acreage. As of reporting date sowing had been completed in the Grodno region and slightly exceeded in Minsk region. Sowing pace is slightly behind the last year's pace. On the same date in 2015 buckwheat had been sown at 11 Th ha or 36.5% of the intended acreage. According to the estimates this year buckwheat acreage in Belarus will be reduced by almost 100% - to 15.6 Th ha against 30.1 Th ha in 2015.

Moldova. Weather conditions and crops developmentDuring May 16-22 colder than usual weather with precipitation was observed in the republic.Amount of precipitation reached 75-180% of weekly norm on 60% of the country’s territory, and 10-65% of weekly norm – on 35% of the territory, mainly in the southern regions. Weather conditions were satisfactory for agricultural crops growth and development. Corn was at leaf formation phase (3rd-5th leaf, in some places - 7th leaf). Moisture reserves in top soil and 1m soil layer reached mostly 80-145% of the norm. Sunflower plants were at the stage of 2nd pair of true leaves formation. The productive moisture reserves in topsoil were 105-145% of the norm, in 1m soil layer – 90-140% of the norm.

Kazakhstan to harvest 15-17 mln tonnes of grainsThe general grain harvest in the current year is forecasted at the level of 15-17 mln tonnes. In 2016 agrarians of the country will receive all required volumes of state support. The plans and forecasts for grain exports in 2016 remain unchanged, as well as the delivery destinations.

Grains

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WheatThe most important news

Wheat newsRussia exported 23 MMT of wheatBy May, 23 Russia had exported 35.21 MMT of grain, according to Rosselkhoznadzor. Last year over July 1 – May 31 Russian grain exports totaled 34.57 MMT. Exports of wheat exceed last year volumes by 10%. Since the beginning of the current season (July 1 – May 31) Russia exported 23.10 MMT of wheat against 21.05 MMT over the same period of 2014/15. According to the forecast, this season wheat exports may total 24-25 MMT.

Ukraine Wheat Crop Set to Beat Most Forecasts on Better WeatherImproving weather that caused “ideal” conditions for Ukrainian wheat means output will probably exceed most analysts’ forecasts. Ukraine’s farmers will reap about 23 million metric tons of winter wheat in the season starting July. Traders and analysts are getting more positive on the crop as improving weather boosts yields and helps compensate for a decline in the planted area. Most had expected a sharp drop in production after dryness during autumn hampered plantings for the winter crop. A better-than-forecast crop in the world’s sixth-largest wheat shipper may help further dampen prices that fell 8 percent in the past year in Paris. Wheat futures traded in Paris fell 2.6 percent this year, extending three years of losses as bumper crops from Australia to the U.S. overwhelmed demand. Global stockpiles are near the highest in three decades. Better conditions mean yields will rise to 4 tons per hectare this year from 3.8 tons a hectare in 2015 as Ukraine got enough rain and escaped extreme heat in May.

Russia. Decreased demand for wheat pressured pricesLast week export prices for Russian 12.5% wheat decreased by USD 1 to USD 191-196/MT FOB in the Novorossiysk port. Reduction of Russian wheat exports against the backdrop of decreased demand from importers pressured prices, as well as bearish trend in the global wheat market. In the Azov port offer prices for 12.5% and 13.5% wheat ranged USD 175-180/MT FOB and USD 182-185/MT FOB, June delivery, respectively. Russian domestic wheat market was characterized by prices stabilization. At the end of the reporting week prices for 12.5% milling wheat remained at RUB 12500-12700/MT CPT-port due to low trading activity in the domestic market.

Australian wheat fears ease after May rainsWheat condition has improved markedly in Eastern Australia, after rain moved through the region. Fears were growing for Australian winter wheat, which is sown between April and June, due to dry conditions. Winter crops were facing very dry planting conditions on the east coast but good rain has markedly improved sentiment. In May, many parts of Eastern Australia enjoyed good planting rain, lifting optimism around wheat yields this season. Improving conditions are weighing on Australian wheat prices, even as Chicago wheat rallies from its early-March lows. Australian producers have seen a limited increase in farm gate prices, as a combination of wet weather domestically and lacklustre export demand kept a lid on prices. But these lagging prices could open up export opportunities. July wheat futures in Australia closed at $273 a tonne on Friday. And Australian wheat farmers, who will take us much rain as they can get, will now be looking forward to the possibility of La Nina, which usually brings heavy rains to Eastern Australia during the crucial seed feeling period of August and September. The BOM currently has the possibility La Nina in 2016 at around 50%, with other forecasters putting the chance as high as 75%.

Egypt meets local wheat buying target of 4 million tonnesEgyptian authorities have reached their domestic wheat procurement target for this harvest season. The government has bought 4.07 million tonnes of wheat from Egyptian growers, meeting the target of 4-4.5 million tonnes announced in March by the vice chairman of Egypt's state grain buyer Mamdouh Abdel-Fattah. Egypt’s government has long bought wheat from local farmers at a subsidised, higher-than-international price to encourage domestic production and provide for its nationwide subsidised bread programme that feeds tens of millions. Authorities offered a subsidised price of EGP 420 per ardeb for local wheat this season, reversing an earlier decision to buy from local farmers at the international price while granting them a direct cash subsidy of EGP 1,300 per feddan of wheat in order to prevent graft. Last year, the government announced buying a record 5.3 million tonnes of wheat from local farmers, compared to 3.7 million in the previous year. This prompted speculation from industry experts that as much as 2 million tonnes may have been imported wheat passed off as local grain to take advantage of the subsidised price. The Arab world's most populous nation, Egypt is the world’s largest importer of wheat, bringing in an estimated 11 million tonnes during the 2015/16 marketing year (July/June)

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BarleyThe most important news

Barley newsRussia to strengthen positions in Arab barley marketsNext season barley production in Russia will increase, despite reduction of acreage. Barley production will rise by 2-3% (17.8 MMT compared to 17.4 MMT in 2015/16). Favorable weather conditions in winter and spring contribute to production growth. Next season Russian barley export capacity will most likely remain at level of the current season – about 4.2-4.3 MMT, and Russia will be able to strengthen its positions in new markets. In the current season Kuwait has already imported 35% more barley from Russia than during the whole last season (190.8 KMT compared with 140.4 KMT). In the 2015/16 season Egypt imported almost 300% more Russian barley than in the 2014/15 marketing year (59.1 KMT compared to 15.4 KMT). UAE, Oman and Lebanon also increased imports of Russian barley.

Ukrainian barley gained foothold in Chinese marketSpring barley sowing has been almost completed in Ukraine, which allows making preliminary estimates of barley production and exports in the 2016/17 marketing year. Currently market estimates of barley production range 7.7-8.7 MMT. In particular, USDA estimates barley harvest at 7.8 MMT, the Agriculture Ministry of Ukraine – at 8.67 MMT, UkrAgroConsult – at 8.1 MMT. 70% will be traditionally shipped abroad in July-September. Saudi Arabia will remain the largest importer of Ukrainian barley with total import demand at record high of 9.5 MMT. Meanwhile, demand from China may slightly decrease, due to the policy of feed grain stocks reduction in the country. As a reminder, in the current season China has imported record high volume of Ukrainian barley – 686 KMT.

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CornThe most important news

Corn: newsEgypt decreases purchases of Romanian cornIn February 2016 export shipments of Romanian corn were lower than in the previous two seasons and totaled 208.7 KMT. Since the beginning of the season (September- February) Romania exported 2016.4 KMT of corn, which is 43% lower than over the same period of record high 2014/15. EU countries remain the key buyers of Romanian corn purchasing 70% of the total Romanian corn exports since the beginning of the season. In February the key export destinations were Spain, Iraq and Italy. It should be noted that in the first half of this season Egypt decreased its corn purchases to 90 KMT against 215 KMT over the same period of 2014/15.

Argentine corn harvest slowest in years - as farmers focus on soyArgentina's corn harvest has become – by a distance – the slowest in recent history. Argentine growers harvested just 0.8% of their corn over the last week – taking the overall completion rate to 29.1%. That is, by a margin, the slowest harvest on a chart kept by the exchange, whose data go back to 2004, coming in short of the 35.8% figure reported for late May in 2014, which had previously been the most tardy campaign. And it is less than half the typical pace, with Argentine farmers usually getting nearly 70% of their corn in the barn by now - implying that growers are more than 1.2m hectares behind in harvesting this year.The Argentine soybean harvest advanced 11 points week on week to reach 72.1%, reducing to the equivalent of 18.2 points the delay on last year's pace. The focus on soybeans reflects the particular importance of Argentina for world soy markets, with its farmers growing, by area, more than five times as much of the oilseed as corn, and with the country ranking as the top exporter of soymeal and soyoil. Indeed, Argentina's delayed harvest has been seen as a key factor in driving Chicago soymeal futures up by more than 50% since early April to their highest since 2014, forcing buyers to turn to the US supplies. Argentine export prices of soybeans themselves have risen by some 8% over the past month, to $412 a tonne, eclipsing rises of less than 6% in Brazilian and US supplies, which appreciated to $415 a tonne and $421 a tonne respective. However, the slowdown in Argentina's corn harvest bodes ill for Brazil, which is relying on its neighbouring country in part to make-up for a shortfall in its own supplies, thanks to a disappointing safrinha corn harvest after an overzealous export campaign in 2015. At $195 a tonne, nearby upriver fob prices were 9% higher month on month.

Oilseeds

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RapeseedThe most important news

Rapeseed: newsRomania. Rapeseed exports will not exceed 750 KMT this seasonAt the end of the current season Bulgarian wheat and corn exports improved, notably primary to EU extra community destinations. According to estimates of UkrAgroConsult, by the end of the season wheat exports from Bulgaria may exceed 3 MMT. Corn exports also improved, but are still far behind the pace of 2014/15 MY. Domestic corn prices continued to rise last week. Prices were supported by further strengthening in the world market, as well as recovery of trading activity in Bulgarian domestic market.

In the season 2016/17 MG global rapeseed production will decreaseAnalysts Oil World cut its forecast of the world rapeseed production in the season 2016/17 MG relative to previous forecast by 0.7 million tons to the level of 63,65 million. Expectations regarding gross yield of rapeseed revised for the following countries: China – to 8.5 mln tonnes, against the previous 9.5 million tone, EU countries – up to 21.75 million tone against 22.34 million tone, Ukraine – to 1.38 million tons compared to 1.85 million tone, India – to 6.3 million tonnes compared to 5.6 million tons, Australia – up to 3.6 million tons compared to 3.0 million ton, Canada – to 17.2 million tons versus 17.23 million ton. it is Reported that the main reason for the drop in production will reduce acreage under rapeseed, because many farmers pereorientirovanija to the cultivation of more profitable crops. At the same time in Australia, India, Canada and Russia it is planned to increase the area under oilseeds. Overall in the season 2016/17 MG in the world rape will be sown 33.1 million hectares, while last season the figure was 33.3 million hectares. Experts predict that the average yield of rapeseed in the new season will be lower than in the previous year, but 5 % higher than the average for the last 5 years. Thus, the volume of the world's supply of canola in the season 2016/17 MG is insufficient and will be 69,03 million tone against 70,29 million tons in the current season.

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SunflowerThe most important news

Sunflower: newsUkraine: in the peak period, granaries store 40% of grains and sunflower seed onlyIn the peak period, granaries of Ukraine accumulate 40% of the general harvest volumes of grains and sunflower seed only. As of December 1, 2015, Ukraine had the harvest volumes of grains and oilseeds at 71.9 mln tonnes, according to the State Statistics Service. But agricultural producers stored 19.3 mln tonnes of grains and sunflower seed volumes, and various storage and processing specialized enterprises - 12.4 mln tonnes. Such distribution of crop stocks contributed to the fact that the maximum load of specialized capacities was observed in Cherkasy oblast, and totaled 48% only. In terms of the storing capacities at 1.8 mln tonnes in the oblast, in the peak of accumulation works the stored volumes reached 852 thsd tonnes of crops

Since the beginning of 2016, Russia reduced sunflower oil productionIn January-April of 2016, the production volumes of crude sunflower oil and its fractions in Russia totaled 1.3 mln tonnes, a decrease of 5.1% compared with the same period in 2015. At the same time, the production of wheat and wheat-rye flour increased by 1.8%, to 2.9 mln tonnes.

EU increased the imports of Ukrainian high-oleic sunflower oilDuring 8 months of 2015/16 MY (September-April), Ukraine exported 28.6 thsd tonnes of high-oleic sunflower oil, against 31.4 thsd tonnes in the same period of the previous season (down 9%). At the same time, in the reporting period the EU countries imported 26 thsd tonnes of the commodity, or over 90% of the general supplied volumes from Ukraine. The United Kingdom (9.6 thsd tonnes) and Spain (8 thsd tonnes) became the key European countries-importers, which together purchased over 60% of Ukrainian high-oleic sunflower oil supplies. During several recent years, the EU continues gradually increasing the import rates of the reporting type of veg oil, and significantly strengthens its positions in the structure of Ukrainian exports.

Kazakhstan. Investments in sunflower oil production continueInternational investment company Oil Impex Business Corporation completed the consolidation of intellectual property under the trademark "Milora" and "Razdolie" in Kazakhstan, Uzbekistan and Belarus. Investment project cost is about USD 2-2.5 mil. In addition to bottled oil production, the company plans to invest part of investment funds in development of product distribution system. Active promotion of these brands in Kazakhstan, Uzbekistan and Belarus markets starts in July 2016, when the first batch of ready products is going to be released. Company's plan for the coming years is to obtain 10-15% market share of these countries.

Romania may export 1 MMT of sunseed in 2015/16 seasonTraditionally sunflower seed dominates in the structure of Romanian oilseeds exports. Season 2015/16 began quite actively. During September-February of season 2015/16 sunseed exports reached 991.3 KMT. During September-February of season 2013/14 Romania exported 1181.2 KMT, in season 2014/15 – 1032.5 KMT. Exports were high owing to record sunseed harvest in those years. The European Union remains the main buyer of Romanian sunflower seed. Almost 85% of total exports were shipped to EU countries in the current season. Besides, significant volume of sunseed was supplied to Pakistan, Turkey and Republic of South Africa.

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SoybeansThe most important news

Soybeans: newsAbout 80%' of Ukraine soy grown - illegally - from GM seedAbout 80% of Ukraine's soybeans, and 10% of corn, are grown – illegally – from genetically modified seed. The US Department of Agriculture - expanding on an initial estimate two weeks ago that Ukraine will produce a record 5.0m tonnes of soybeans this year - said the forecast reflected in part expectations of yield matching an all-time high of 2.17 tonnes per hectare, supported by genetically engineered seed. While the USDA, and some other commentators, have previously raised reports of Ukrainian farmers unlawfully using genetically modified seed, the 80% figure is higher than those, often of around 30%, previously suggested. The scramble by Ukraine farmers to boost yields comes in the face of "increasing demand" for soybeans, both for export and from the country's poultry industry.

Growth of soybean prices to boost the oilseed planted areas in the USASignificant increasing of soybean prices in the USA is likely to encourage farmers to enlarge the oilseed planted areas in the country in the new season. So, in March 2016 the USDA analysts estimated that farmers will plant 82.236 mln acres of soybeans, but since release of the forecast the soybean prices have surged by 17.9%, making the oilseed even more attractive for crop producers. So, it is expected that in the new season soybeans will compete with corn for available planted areas, as the grain prices are also developing in the bullish trend. As a reminder, the corn planted areas in the current year is forecasted at the level of 93.601 mln acres. But due to higher price attractiveness of soybeans, some share of con areas can be designated for the reporting oilseed.

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