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CONTENTS

1. ECONOMY AND BUSINESS .............................................................................................................................. 2 2. CROP CONDITIONS, MAY 27 ............................................................................................................................ 4 3. GRAIN MARKET NEWS ..................................................................................................................................... 4

3.1. TOPIC OF THE WEEK .............................................................................................................................. 4 3.2. WEEKLY SUMMARY ................................................................................................................................ 6

4. OILSEEDS MARKET ......................................................................................................................................... 10 4.1. TOPIC OF THE WEEK ............................................................................................................................ 10 4.2. WEEKLY SUMMARY .............................................................................................................................. 11

Highlights

Ukraine. Spring sowing campaign is 98% complete

Buckwheat production decreased by 33% in Ukraine

Ukrainian wheat prices slide down

Ukraine: Domestic sunflower seed prices increased

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AgriNews, Kyiv #22, May 23-30, 2016

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1. ECONOMY AND BUSINESS

Place your bets, ladies and gentlemen: Federal Funds Rate and commodity prices decrease

The US Federal Reserve, an analogue of a central bank, will hold its regular meeting on June 14-15, where the next increase of the Federal Funds Rate will be considered. This interest rate is a percentage, paid by commercial banks to the central bank for financial borrowing. Increase of the base interest rate directly means more expensive borrowing for commercial banks. However, it also has a number of indirect effects, including pressure on global commodity prices.

Since 2009 the base interest rate remained record low at 0.25%, as a response to the global economic recession. The base interest rate is one of the monetary policy tools, which is used to regulate value of currency. Low rate means cheap money, increased rate – more expensive borrowing. In December 2015 the Federal Open Market Committee decided to raise the base rate by 100% to 0.5%. They also announced two further possible increases in 2016. One of them was scheduled for June 2016.

The Federal Funds Rate increase promoted reduction of global commodity prices, which began in mid-2014. Appreciation of US dollar, in which prices are defined, and most of international trade is carried on, provoked this reduction. Base rate increase means strengthening of the anti-crisis tool for US government, which helps to avoid negative interest rates, like in EU and Japan. When making a decision the Federal Reserve focuses on four key indicators: inflation, employment index in the USA, household spending and capital investment of companies.

The benchmark rate of inflation is 2 percent year on year. Annual inflation reached only 1.68% in December 2015, and since August 2015 even deflation was noted. Meanwhile, the US market created 2.7 million jobs. Household spending increased to record USD 99 per capita per day in December. Investments also exceeded the pre-crisis level of 2007, and were only USD 10 billion below the record high of 2000. Consequently, three out of four factors were positive, which led to base interest rate increase.

Повышение ставки в декабре 2015



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Based on this analysis it is possible to predict a decision of the Federal Reserve in June. Firstly, inflation already reached 1.15% during January-April 2016. This is 0.39% more than during the same time in 2015. The market created 769 thousand jobs compared to 821 thousand in 2015. Daily household spending reached USD 184 per person in March-April 2016, compared with USD 176 in March-April 2015. And finally, investments decreased since the first quarter of 2015 and reached USD 435.1 billion in the first quarter of 2016 compared to USD 435.9 billion in the first quarter of 2015.

Therefore, two out of four fundamentals – inflation and household spending – point at the base interest rate increase. The remaining two – investments and labor market – are lower than in 2015, but still close to the historic high. Consequently, we can expect an increase in interest rate, and further reduction of commodity prices.

In 2016 an interesting politico-economical and psychological factors are observed, which may influence the decision of US Federal Reserve. During the election year US experts talk more about positive trends. If the base interest rate is raised (central banks always raise it during the economic growth period in order to prevent “overheating” of the economy), this will confirm favorable reports on economic growth. If the base interest rate is left unchanged, this means that not everything is so rosy before voting in November. What is more important – manipulation of interpretations or interpretation of manipulations?

Financial state of crude oil producing companies in the USA is an additional indirect factor, which may influence the base interest rate. During 2014-2015 US companies invested significant funds in oil-fields development in a new way. Price reduction in early 2016 put them on the brink of default. Price recovery in April-May "brought them back into business" again. That’s why these companies would be very unhappy with another price slump. As a result, the importance of the companies’ interests may also count against the base interest rate increase.

A decision to leave the Federal Funds Rate unchanged as a part of a reserve scenario will indicate continuation of the price recovery trend. At the same time, this recovery will be temporary, as entry of the above-mentioned US companies into the market and increase of supply will pressure prices again. Only unpredictable events, having an adverse effect on supply, will be able to provoke price hikes.

Alex Morgun Financial analyst UkrAgroConsult

Падение индекса цен на сырье, декабрь 2015

Повышение ставки в декабре 2015



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2. CROP CONDITIONS, MAY 27

Last week fluctuations of night and day air temperatures were observed all over the country. Showers of various duration and intensity were accompanied with hail and strong wind. Average 10 days temperature occurred to be lower than norm in the East of the country by 1-2 °С) and in the West – by 2.1-3 °С. Maximum air temperature increased to + 21-26 ° С and minimum lowered to + 2 °С. Average 10 cm soil temperature equaled +13..+20 ° С.

Average air humidity (10 day period) varied within 69% to 84%. During 1-2 days it lowered to 30% in some places and even lower. As of May, 20 sum of effective air temperatures exceeded average multiyear values. The largest precipitation amount (10 day period) was seen in Zhitomir (92 mm) and Sumy regions, the lowest - (10 mm) –in Odessa region.

Under early spring grain crops moisture content was satisfactory in plough layer (21-40 mm), and excessive (more than 40 mm of productive moisture). Only small number of fields had 17-20 mm. Along with this, air and upper soil layer moisture excess accompanied with night and day air temperature fluctuation preconditioned some slowdown in crop development with simultaneous increase in weed amount, especially in spring grain crops (spring wheat, barley and triticale).

Considering crop conditions, plant development and weather forecasts for the next few days, winter wheat will reach milk ripeness stage during June 6-12, wax ripeness – June 23-29, which is a week earlier than multiyear norms. Soil moisture stocks will be satisfactory during the filling and ripening of grain.

In the Northern and North-Eastern parts of Ukraine winter grain crops continued to undergo stem elongation and head formation stages. In the South of the country (Kherson and Odessa regions) stage of milky ripeness in barley is observed extremely early. Crop conditions are mainly good and satisfactory.

Corn is at the stage of leaves formation (3-7 leaves appearance), plants height 19-29 cm. Crop condition is good.

Winter rapeseed is mainly in good and satisfactory conditions. Plants continue to form pods. Sunflower forms second pair of true leaves, and clusters in some places. Late-sown plants are at the stage of emergence. Plants height is 14-26 cm, and their condition is mostly good.

3. GRAIN MARKET NEWS

3.1. Topic of the week

Ukraine ceases wheat exports to EU

According to European Commission, by May 20 Ukraine had taken up the quota for wheat exports to EU countries by 99.64%. A little more than 3 KMT out of allowed 950 KMT remained undistributed. After distribution of the remaining quota and until the end of 2016 Ukrainian wheat will be supplied to EU market only with import duty. What does it mean for Ukrainian market?

This fact will not be substantial for wheat of 2015 harvest, as the season is almost complete. And it was successful. In the 2015/16 season Ukraine has significantly increased shipments to EU compared with last marketing year and set a new record. The fact that exports increased not only in quantity, but also by value is most important. European countries are among three largest importers of Ukrainian wheat this season with a share at nearly 13%, being behind Thailand and Egypt.



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Importers of Ukrainian wheat, season 2015/16 Ukrainian wheat exports to EU countries, KMT

Nevertheless, new wheat harvest of about 21.5 MMT, most of which will need to be exported, will enter domestic Ukrainian market in July. Largest wheat shipments from Ukraine are usually observed in September-November, while a new quota for duty-free supplies to the EU will be allocated only in January 2017. It means that during the period of mass supply/exports Ukrainian wheat will not be able to compete on European market. A complete stoppage of export shipments to the EU until January 2017 may be the first scenario.

The second scenario may be the following. Wheat, which will be supplied to EU markets above the "Ukrainian" quota, must be subject to EUR 12/MT import duty within another quota "for third countries", which allows supplying 1.19 MMT of wheat to the EU during the second half of 2016. All wheat above this quota is subject to a prohibitive duty at EUR 95/MT.

In other words, Ukraine can theoretically export new crop wheat to the EU, but with a EUR 12 discount (or even EUR 95/MT). Such shipments will become possible, if domestic prices decline by the same amount. In fact, the second scenario suggests that Ukrainian farmers will pay for wheat shipments to EU countries.

There is a third scenario in which the European Union will give a helping hand to fraternal people once again and expand the Ukrainian quota. However, this scenario assumes great desire and work of both official parties, and that’s why it seems hardly probable.

It should be noted that presently the first scenario (export stoppage) seems most likely. We should look at recent past to believe in this scenario. Until 2014, when a special zero quota was allocated, Ukraine supplied wheat to EU countries within the quota for third countries (EUR 12/MT). Usually after the quota was filled of, export shipments stopped, as prices became uncompetitive.

In 2016 the European countries are likely to gather only slightly lower harvest than last year, which was record high. Besides, they are going to reduce imports by nearly 1 MMT due to relatively high stocks. This fact will not promote Ukrainian exports to the EU markets.

Certainly, there are other markets and possibilities: for instance, North Africa, Southeast and South Asia, Middle East, etc. However, UkrAgroConsult believes that in the first half of the next season producers and sellers of Ukrainian wheat will face hard times of prices decrease. Unfortunately, there are no other ways to improve competitiveness of our grain so far. Well, unless further devaluation of the national currency with all the consequences that come with it.

Elizabeth Malyshko Chief grain market expert

UkrAgroConsult



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3.2. Weekly summary

World market

Wheat

During the reporting week (May 19-26) CBOT wheat prices kept rising, supported mainly by weather factor. Excessive rains were observed in winter wheat producing regions, and they could have negative impact on plants, as well as delay harvesting. Harvesting has started in Texas. Farmers harvested nearly 6% of the intended area last week.

Further price growth was limited by US wheat exports decrease. During May 12-19 contracting of old crop wheat for exports was only 9.9 KMT, and 345.9 KMT – of new crop, which was much lower than market expectations. Considering low export shipments amid strengthened export prices, the country will enter the new 2016/17 season (which starts on June 01 in the USA) with high wheat carry-over stocks.

Last week wheat futures increased by 2.69%.

Corn

During the period under review (May 19-26), CBOT corn futures strengthened again. Rains complicated corn sowing in the USA. Seeding had been conducted on 86% of the intended area (90% by the same date last year). Waterlogging of topsoil was observed in regions where heavy rains had stopped.

The market was also supported by strengthened adjacent market of soybean and reduction of Brazilian corn supply in the world market, due to shortfall in production.

During the reporting week CBOT corn prices grew by 4.67%.

Tenders of the week

Held tenders

Date Importer Commodity Volume,

KMT Origin

Purchase price, USD/MT

Delivery basis

Shipment/delivery period

May 23 Israel feed wheat 20 Ukraine 172.25 C&F August-September

May 23 Israel corn 180 USA 194 C&F May, July, August

May 23 Israel barley 15 Ukraine 161.9 C&F August-September

May 23 Taiwan corn 65 USA n/a n/a August

May 24 Jordan hard wheat 100 optional 202 C&F October

May 25 South Korea feed wheat 60 optional 189.9 C&F September

May 26 Japan milling wheat 125,05 USA, Canada,

Australia n/a C&F

June, July, September



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Issued tenders

Importer Commodity Volume,

KMT Origin

Shipment/delivery period

Algeria hard wheat 50 optional July-August

South Korea corn 70 optional August

Jordan hard milling wheat 100 optional November-December

Bangladesh milling wheat 50 optional n/a

Facts and rumors

Grain shipments from Ukrainian seaports

Market operators estimate that Ukraine exported 1162.5 KMT of grain from ports during May 1-23, 2016, including 705.8 KMT of wheat, 17.9 KMT of barley and 393.8 KMT of corn. Wheat was exported to Egypt, Bangladesh and Thailand. Barley was exported to EU and Libya. Corn was exported to EU, Egypt and Iran.

546.9 KMT of grain including 215.0 KMT of corn, 276.6 KMT of wheat and 55.3 KMT of barley are expected to be shipped from ports in the near future.

Ukraine. Spring sowing campaign is 98% complete

As of May 27, spring grains and pulses had been sown at 7146 Th ha or 98% of the intended area (7328 Th ha), compared with 6764 Th ha by the same date last year.

Corn had been sown at 4372 Th ha (97%) against 4241 Th ha in 2015, buckwheat – 127 Th ha (98%) against 112 Th ha in 2015, millet – 81 Th ha (67%) compared to 84 Th ha last year, rice – 11 Th ha (97%), sorgum – 58 Th ha (70%).

More than 70% of Ukrainian barley was shipped to Arab countries

In April 2016 Ukraine exported 156.3 KMT of barley which was twice as much as in March and 62% more than in April 2015 (96.6 KMT).

Since the beginning of 2015/16 total volume exported decreased by 3% to 4196.7 KMT against 4329 KMT over the same period in 2014/15.

Traditionally, major part was imported by Saudi Arabia – more than a half of total Ukrainian barley exports this season.

Essential increase in exports to other countries of Arab world was the main feature of the current season. Ukrainian exporters doubled shipments to Libya and Algeria, increased exports to Jordan. Qatar became a novelty of this season, and imported more than 57 KMT. Since the beginning of this season Arab countries purchased 72% of total Ukrainian barley exports.



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Ukraine. Buckwheat groats production declined by 34%

Grits production continues to get lower in Ukraine. Over the four months of 2016 Ukraine produced 100.8 KMT of grits which is 2% less than over the same period in 2015 – 102.7 KMT.

The most considerable decrease is observed in buckwheat groats production – by 34% to 13.9 KMT against 21 KMT over January-April 2015. Also there was a decrease in peeled and pearl barley grits output. Growth is seen in production of such grits as: couscous (+38% since the beginning of the year), rice (+35%), oats (+11%) and corn (+10%).

Ukraine. Flour production increased in April

In 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.

Ukrainian market trends

Milling wheat

Last week export prices for Ukrainian milling wheat dropped. By the end of the week export prices for 12.5% and 11.5% milling wheat had lowered on average by USD 3-4 despite world prices growth to USD 183-187/MT FOB and USD 172-176/MT FOB respectively (for shipment in June).

Market was pressured by upcoming start of new crop harvesting. New crop wheat prices are about USD 3-4 lower than prices of old crop. Declarative prices for new crop milling wheat are USD 176/MT FOB – for 2nd grade wheat, and USD 172/MT FOB – for 3rd grade wheat (July shipment). So far, there are no active sales of new crop wheat, and old crop sales are starting to fade away.

Domestic prices also declined last week. 2nd and 3rd grade milling wheat prices (12.5% and 11.5% protein) dropped by nearly UAH 100 to UAH 4250-4450/MT and UAH 4150-4350/MT EXW respectively. Domestic prices were pressured by upcoming new crop harvesting and low traders' activity due to reduced export demand.



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Ukraine. Average export prices, FOB Black Sea ports, USD/MT Commodity May 27, 2016 May 20, 2016 May 13, 2016 May 29, 2015

Milling wheat, 2nd grade

183-187 June 174-176 July

187-190 May-June

187-190 May-June

194-195 June 188 July

Milling wheat, 3rd grade

172-176 June 172 July

177-180 May-June

178-182 May-June

186 June 183-185 July

- Lower price level – for small consignments

- Prices for grain shipped from Nikolayev, Kherson, Berdiansk and other small ports are $5-7/MT lower than in Odessa and Illichevsk ports. Traders’ margin is not included

Ukraine. Domestic milling wheat prices, EXW UAH/$ Milling wheat 2

nd grade (12.5%) Milling wheat 3

rd grade (11.5%)

UAH/T USD/T UAH/T USD/T

Min Avg. Max Min Avg. Max Min Avg. Max Min Avg Max

May 27 25.0999 4250 4350 4450 169 173 177 4150 4250 4350 165 169 173

May 20 25.2596 4350 4450 4550 172 176 180 4250 4350 4450 168 172 176

May 13 25.3129 4350 4450 4550 172 176 180 4280 4380 4480 169 173 177

Ukraine. Domestic prices for wheat flour, EXW UAH/$ Wheat flour. top gr. Wheat flour. 1st gr.


Min Avg. Max Min Avg. Max Min Avg. Max Min Avg. Max

May 27 25.0999 5300 5500 5800 211 219 231 5050 5250 5450 201 209 217

May 20 25.2596 5300 5500 5800 210 218 230 5050 5250 5450 200 208 216

May 13 25.3129 5300 5500 5800 209 217 229 5050 5250 5450 200 207 215

Feed grain market trends

Price reduction was also observed in feed wheat market last week. Export prices declined by USD 2-3 to USD 170-173/MT FOB for June delivery. Consequently, the price spread between old crop milling and feed wheat decreased to USD 2.

New crop feed wheat prices ranged USD 168-170/T FOB for July delivery. Besides, feed wheat of new crop was contracted for exports quite actively. Demand decrease somewhat for old crop grain.

Conditions of domestic feed wheat market were similar to those of milling wheat market. Prices were pressured by upcoming harvesting and low domestic demand. Last week prices went down by UAH 100-150 to UAH 4050-4250/MT EXW and UAH 4250-4450/MT CPT.

Only corn prices increased last week. This market remained the most active. Export corn prices strengthened by USD 1-2 and reached USD 186-189/MT FOB for June delivery, supported by price growth on the world market.

Domestic corn prices increased by UAH 150-200 to UAH 4550-4750/MT EXW and UAH 4900-5100/MT CPT. The market was supported by limited supply, and restrained sales by producers. Traders raised their demand prices to attract more grain last week.

Both export and domestic barley prices declined. Prices were rather declarative, but they were also pressured by upcoming harvesting campaign. Export barley prices dropped by USD 2 to USD 165/MT FOB for June delivery. Domestic prices decreased on average by UAH 100-150 to UAH 3500-3750/MT EXW and UAH 3800-4100/MT CPT.



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Ukraine. Average export prices, FOB Black Sea ports, USD/MT Commodity May 27, 2016 May 20, 2016 May 13, 2016 May 29, 2015

Feed wheat 170-173 June 168-170 July

173-177 May-June

172-176 May-June

180-184

Feed barley 165 June

155-158 July 167 June 167 May-June 177-180 new crop

Corn 186-189 June 183-185 Oct

184-188 May-June

184-188 May-June

172-175 June 164-166 new crop

Prices for grain shipped from Nikolayev, Kherson, Berdiansk and other small ports are $5-7/MT lower than in Odessa and Illichevsk ports. Traders’ margin is not included

Ukraine. Domestic feed grain prices, EXW UAH/$ Wheat Barley



May 27 25.0999 4050 4150 4250 161 165 169 3500 3630 3750 139 145 149

May 20 25.2596 4150 4250 4350 164 168 172 3650 3750 3900 144 148 152

May 13 25.3129 4050 4150 4250 160 164 168 3650 3750 3850 144 148 152

UAH/$ Corn Wheat bran



May 27 25.0999 4550 4650 4750 181 185 189 2350 2500 2650 94 100 106

May 20 25.2596 4400 4500 4600 174 178 182 2350 2500 2650 93 99 105

May 13 25.3129 4300 4400 4500 170 174 178 2300 2450 2600 91 97 103

4. OILSEEDS MARKET

4.1. Topic of the week

Ukraine. Soybean loses out to sunflower

Soybean had been the most promising agricultural crop in Ukrainian market before 2016. Soybean planted areas and production set new records, and projections for next seasons were also quite optimistic.

Initially the tendency of soybean acreage growth was expected to continue, and planted area was projected to reach at least 2 200-2 250 Th ha in 2016. It means, the area was expected to be expanded by 50-100 Th ha compared with 2015.

However, the current 2015/16 season became a disappointment for soybean producers, and it's not just a question of shortfall in soybean production in 2015. According to our estimates, Ukrainian farmers received 400 KMT less soybeans than expected. Nevertheless, a significant decrease in prices on the world market, and therefore, on Ukrainian market, was the main reason for decreased interest of agricultural producers in cultivation of soybean.

As a result, Ukrainian farmers who lost nearly UAH 4 billion only due to shortage in soybean production, decided to keep down their enthusiasm. Producers decided not to expand the acreage of this oil crop and place a bet on more profitable sunflower. According to Ukrainian Ministry of Agrarian Policy and Food, it was planned to sow soybean at 2024 Th ha (compared with 2148 Th ha in 2015).

Soybean sowing is usually complete by the end of May, and actual planted area usually exceeds the intended one at this time, as it was in 2015, 2014, 2012.

In the current season soybean sowing not only lags behind the last year’s pace, but is significantly lower than projected. Despite the fact that soybean sowing started earlier than usual, by May 27 its acreage had reached only 1788 Th ha (1922 Th ha in 2015 and 2024 Th ha of the intended area). In other words, farmers seeded 236 Th ha less soybean than intended, as it was in 2013.

Considering that final planted area may exceed the actual seeded by the end of May by at most 220 Th ha, it can be assumed that soybean acreage in Ukraine is unlikely to exceed 2000-2050 Th ha in 2016. And it will be the first reduction since 2013.



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Ukraine. Soybean planted area, Th ha

Julia Garkavenko Chief oilseeds market analyst

UkrAgroConsult

4.2. Weekly summary

World market

Crude oil

During the reporting week (May 19-26) NYMEX WTI crude oil prices strengthened by 2.74% and reached USD 49.48 per barrel by the end of Thursday’s trading session.

For the first time in nearly eight months prices broke through USD 50 level supported by reduction of US crude oil stocks and global supplies disruption.

The US Energy Information Administration announced in its weekly report that during the week, which ended on May 20, crude oil stocks in the country decreased by 4.2 million barrels. Market analysts expected that crude oil stocks would decline by no more than 2.5 million barrels.

Soybean

During the period under review (May 19-26) CBOT soybean prices kept strengthening (+0.77%).

Like a week before, soybean prices were supported by strengthening of soybean meal futures. The market expected that shortfall in soybean production in Argentina could reduce its supply on the global market. Over the month July soybean futures have strengthened by 31.4%.

Further growth of soybean prices was limited by decreased soybean weekly export sales from the USA, as well as by information that some US farmers planned to reduce corn planted area in favor of soybean during the current sowing campaign.



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Soybean oil

During May 19-26 CBOT soybean oil futures declined and reached 31.04 cents per pound at the end of Thursday’s trading session (-2.73%). Low export demand amid high stocks pressured the prices.

Rapeseed

During the week rapeseed prices strengthened by 1.77% and reached EUR 374.25/MT on Thursday.

In the May report experts of European monitoring agency MARS revised downwards their estimate of average rapeseed yields to 3.29 MT/ha (3.35 MT/ha in April), which is 2.5% lower than last season. European Commission lowered their estimate of rapeseed production in EU to 22 MMT (22.3 MMT in April).

Palm oil

During the reporting week palm oil prices lost USD 14/MT and reached USD 673/MT (-2.04% during May 19-26).

According to survey company Intertek, during May 01-25 exports of Malaysian palm oil increased by 8.5% to 965.2 KMT compared with the same period in April. Nevertheless, traders believe that export shipments should increase by at least 10% to support prices, especially on the eve of Muslim holiday Ramadan.

Market experts expect improvement of weather in Malaysia in June-August, which will contribute to production recovery and accumulation of high palm oil stocks in the country. Besides, a downward trend in soybean oil market pressured palm oil prices.



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Facts and rumors

Ukraine. Sunflower oil production. What will season summaries reveal?

In April 2016 Ukrainian large and medium-sized enterprises produced 348 KMT of sunflower oil compared to 346 KMT in March 2016 and 298 KMT in April 2015. Since the beginning of the current season sunflower oil production reached 2736.9 KMT which is 6.1 KMT less than over the same period last season.

Considering the current sunflower oil production tendency of 2015/16 (September-April) we can speak about the repetition of the last 2014/15 season’s development scenario. Consequently, large and medium-sized enterprises may produce additional 1000 KMT during the remaining four months of the season, and total production may reach 3800 KMT. UkrAgroConsult estimates that small enterprises will produce about 1000 KMT this season.

To sum up, in the 2015/16 season total sunflower oil production at all Ukrainian enterprises will reach at least 4850 KMT.

Ukraine. Exports of oilseeds from Ukrainian sea ports

Market participants estimate that May 1-23 exports from Ukrainian sea ports included the following:

302.8 KMT of sunoil, 163.0 KMT of sunmeal, 24.0 KMT of sunseed;

129.7 KMT of soybean, 19.8 KMT of soymeal and 2.6 KMT of soyoil.

Additional 184.4 KMT of sunoil, 21.9 KMT of sunmeal, 57.1 KMT of soybean and 5.5 KMT of sunmeal are expected to be shipped abroad in the nearest future.

Ukraine. Tendency of margarine production decrease retains

In April 2016 large and medium-sized enterprises of Ukraine produced 14.6% less margarine - 13.5 KMT compared to the previous month. Production pace is considerably lower than in April 2015 – 16.2 KMT.

Since the beginning of 2015/16 (September-April) Ukraine produced 139.2 KMT of margarine against 165.3 KMT over the same period in season 2014/15. Margarine production is decreasing due to lower domestic and export demand.

Ukraine. Oilseeds sowing progress

By May 27 sunflower had been seeded at 5182.1 Th ha (99% of the intended 5228.9 Th ha), which considerably exceeded last year`s pace by the same date - 4562 Th ha. UkrAgroConsult sticks to its optimistic forecast of sowing area at 6200 Th ha.

Soybean planting slowed down. By May 27, soybean had been seeded at 1787.7 Th ha, which is 88% of the intended 2024.4 Th ha. This was 120.3 Th ha less than by the same date last year – 1908 Th ha.

UkrAgroConsult believes, soybean sowing will gain pace after improvement of weather conditions, but total planted area may be lower than in 2015.



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Ukrainian market trends

Last week diverse trends were observed in the market of oilseeds and their processed products. Export oilseeds prices decreased slightly, while oilseeds processed products prices increased.

Strengthening of world sunflower meal prices due to increased demand and reduction of stocks while approaching the season’s end supported Ukrainian export market of sunflower meal. Last week sunflower meal prices gained USD 20/MT and reached USD 255/MT FOB (seller) and USD 250/MT FOB (buyer).

Considerable increase in export prices influenced the domestic market. Last week both sunflower meal and soybean meal prices increased on average by UAH 500/MT to UAH 5800-6000/MT EXW and UAH 10600 -10800/MT EXW, respectively. Sunflower cake and soybean cake prices gained UAH 200/MT and reached UAH 5000-5200/MT EXW and UAH 9600-9800/MT EXW, respectively.

Domestic sunflower seed prices decreased on average by UAH 200/MT to UAH 10900-11200/MT EXW and UAH 11200-11500/MT CPT. Meanwhile, average soybean prices increased by UAH 100/MT and reached UAH 10000-10400/MT EXW. Strong demand from crushers was observed on the market. Farmers restrained sales of raw materials awaiting further price growth. Most likely, the remaining stocks will be sold in June.

Bearish trend was observed in vegetable oils market. Last week export sunflower oil prices dropped by USD 5/MT. On Friday offer prices for sunflower oil equaled USD 810/MT FOB.

During the reporting week soybean oil and palm oil prices declined by USD 20/MT and USD 15/MT respectively.



15

Ukraine. Export prices for oilseeds, vegoils and products after processing, FOB, USD/MT Commodity May 27, 2016 May 20, 2016 May 13, 2016 May 29, 2015

SUNSEED (Black Sea origin)

440 seller 430 buyer June/July


440 seller 430 buyer

May

380 seller 370 buyer September

SUNOIL 810 seller 800 buyer June/July


June


July/August


July/August

SUNFLOWER MEAL


235-240 DAF

Belarus /Poland

235 seller 230 buyer June/July 215 DAF

Belarus /Poland

230 seller 225 buyer May/June

200 DAF Belarus

235 buyer June

SOYBEAN 400 seller 395 buyer

June


June


June


June

RAPESEED 425 seller 415 buyer

July/August


July/August


July/August


August

Prices for oilseeds shipped from Nikolayev, Kherson, Berdiansk and other small ports are $5-10/MT lower than in Odessa and Illichevsk ports. Traders’ margin is not included

Ukraine. Domestic prices for oilseeds, vegoils and products after processing, EXW, UAH/MT UAH/$ Sunseed Sunoil (crude)


Min Avg. Max Min Avg Max Min Avg Max Min Avg Max

May 27 25.0999 10900 11050 11200 434 440 446 22200 22350 22500 884 890 896

May 20 25.2596 11100 11250 11400 439 445 451 22300 22450 22600 883 889 895

May 13 25.3129 11000 11100 11200 435 439 442 22200 22300 22400 877 881 885

UAH/$ Soybean Rapeseed*


Min Avg. Max Min Avg. Max Min Avg. Max Min Avg. Max

May 27 25.0999 10000 10200 10400 398 406 414 9700 9800 9900 386 390 394

May 20 25.2596 10000 10100 10200 396 400 404 9700 9800 9900 384 388 392

May 13 25.3129 9900 10000 10100 391 395 399 9700 9800 9900 383 387 391

*calculated prices

The AgriNews, Kyiv team:

Sergey Feofilov Editor www.ukragroconsult.com www.blackseagrain.net

Tel.: +380 44 451 46 34

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