Interactive: Ukraine-Russia conflict shakes agriculture supply chains, raises food security concerns

Europe's wheat farmers are having to consider when best to sell their upcoming crop, two months after Russia's invasion of Ukraine triggered a surge in prices that has resulted in a steep backwardation in the market. That surge applied to prompt delivery as importers rushed to secure alternative supplies. But with most farmers' wheat was in the ground, not in silos, they have been watching forward prices for delivery in the months after the 2022 harvest. While France and Romania are the EU's two largest exporters, farmers in the two countries have shown a very different appetite for risk, sources said. "French farmers have been selling quite a lot ... while in Romania farmers are not moving," said one trader, who estimated that around 30% of France's wheat crop has already been sold for the 2022-23 marketing year (July-June). Rising input costs, especially for fertilizer and fuel, would typically encourage wheat farmers to lock in future sales, often under pressure from banks who have financed the purchases. But many now believe in the potential for further price increases. "We are not seeing much activity at all on the new crop ... it is very unusual," said another participant in the Black Sea wheat market. "They [Romanian farmers] want to wait as long as possible not to sell too low, as long as Russia and Ukraine remain absent or slow, and they do better still." Ukraine represented 8% of total global exports in My 2020-21. The suspension of its seaborne exports at the end of February was felt most acutely by those seeking wheat for shipment in March and April, leading to a steep premium for prompt cargoes. In France, a farmer who agreed April 27 to sell 11% protein wheat for delivery in May would receive Eur418.50/mt ($449/mt) while they would get Eur41/mt less if they sold for delivery in September (based on the price of MATIF wheat futures at 1630 GMT). The backwardation between May and September is typical given that the new wheat crop is usually available across Europe from late June, but the size of this year's discount is exceptional. At the same point in 2021, when the May contract was at Eur248/mt, the discount for September was Eur20.25/mt. It was just Eur8.75/mt in 2020 and Eur10/mt in 2019. The closure of Ukraine's main ports has forced grain exporters to employ trucks, trains and barges, which limits exports to around 500,000 mt per month, rather than around 5 million mt before the war, traders said. Russia's ports, meanwhile, were expected to ship at least 2 million mt of grain in April, not far from pre-war expectations for this comparatively quiet point in the year. But Russia's wheat exports may show larger year-on-year falls after the harvest, given that the war has made it harder for Russians to insure cargoes and find vessels.

Sugar production in Brazil's Center-South for the first two weeks of the 2022-23 season showed a drop of 79.99% year on year at 126,627 mt, data from trade association UNICA showed April 28. The figure was lower than the consensus expectations of 278,900 mt from 10 analysts surveyed by S&P Global Commodity Insights. Mills in CS Brazil crushed 5.19 million mt of sugarcane in first-half April, down 66.87% year on year, UNICA said. "The reduction in the cane crush for H1 April was because lesser mills were in operation compared to the prior season due to an average 15-20 day delayed start to the harvest because of suboptimal weather induced poor cane maturation," a Sao Paulo-based trader said. Sugar's share of the crush for H1 April was 25.95% compared with 38.80% a year earlier. A total 85 mills were operating as of April 16, 64 less than in the same period of 2021. Market participants expect another 104 mills to begin operation in second-half April. Total recoverable sugar, or ATR, in H1 April was 98.66 kg/mt, a decrease of 9.72% year on year. Ethanol production, sales Ethanol production in CS Brazil was 397.53 million liters in H1 April, down from 735.66 million liters a year earlier, UNICA said. Hydrous ethanol production accounted for 381.55 million liters of the total, while anhydrous ethanol output was 15.98 million liters, it said. Corn ethanol production in H1 April was 170.32 million liters, an increase of 48.52% year on year. Ethanol sales by mills in CS Brazil during H1 April were 1.054 billion liters, 6.67% higher year on year, with 1.027 billion liters going to the domestic market and 27.36 million liters for export. The quantity of hydrous ethanol sold to the domestic market was 678.28 million liters, 2.83% higher on the year. The quantity of anhydrous ethanol sold to the domestic market was 348.32 million liters, 11.99% higher on the year.

The first cargo of Ukrainian corn since the Russian invasion of that country on Feb. 24 has been loaded for export in Romania, Ukrlandfarming, the company loading and selling the grain, said April 28. The Panamax-sized cargo was loaded with Ukrainian corn in the Romanian port of Constanta, a Ukrlandfarming trader told S&P Global Commodity Insights. The ship was slated to sail late April 28, the trader said. Its destination was not disclosed. The ship was loaded and sold on FOB basis, said the trader. A producer of grain, oilseeds, poultry and eggs, Ukrlandfarming has been shipping corn to Romania by rail from its elevators in Ukraine to finally load 71.2 million mt of corn, the company said. The export of goods out of the Ukrainian Black Sea ports in the Odessa and Mykolaev regions stopped after the Russian invasion.. As a result, Ukraine had to look for alternative routes, railways in particular. However, the export potential by rail is limited to 450,000-700,000 mt/month of grain, according to market sources, compared with 5 million-6 million mt/month before the war. Lower export potential puts pressure on domestic prices while providing support to the international market. Exports by rail are constrained mainly by the number of wagons and the capacities of border-crossing points with EU countries, Poland and Romania in particular, because of differing rail gauges, which requires reloading of goods on different wagons.

Demand for soybeans from China -- the world's biggest importer of soybeans -- is forecast to fall 3.5%-6.1% year on year in 2022 due to lower demand from the downstream feed sector, a survey of market participants at more than 10 major trader, crusher and broker companies by S&P Global Commodity Insights found April 21. A slowdown in purchasing since November 2021 when the crush margin turned negative had the industry at the start of 2022 conservatively estimating China's soybean imports for the year at 97.2 million mt, edging up 0.69% from 96.5 million mt in 2021. However, global supply tightened in the first quarter due to a drought in Brazil that delayed harvesting and a slowdown in exports due to bad weather. Soybean prices surged to a record high in March as a result and negative crush margins in China persisted, curbing soybean demand from Chinese crushers. The gross crush margin was assessed at minus $23.06/mt by S&P Global April 20. According to market sources, the net crush margin could be closer to minus $63/mt. China's soybean imports fell 18% year on year to 6.35 million mt in March, General Administration of Customs data showed. Imports over Q1 fell 4.2% year on year to 20.3 million mt, the customs data showed. The market participants surveyed by S&P Global expected imports to fall by an average of 3.4% over April-December compared with the same nine-month period of 2021. Total imports for 2022 were forecast at an average of 92 million-93 million mt by the market participants surveyed, down from realized imports of 97.2 million mt in 2021 in GAC data, implying a reduction of 3.6%-4.7%. "The lowest demand estimation for the yearly import volume of soybeans would be 90.7 million mt, and we are probably experiencing the major demand reductions in Q2 and upcoming Q3," a soybean analyst based in China said. Total imports in 2022 at this volume would equate to a 6.1% year-on-year decline. The gross replacement margin for spot trading remained healthy April 20 at Yuan 661/mt, equating to $103/mt. "This would discourage crushers from hedging against the Dalian Commodity Exchange as crushers are incentivized to sell spot cargoes of soybean meal and soybean oil, resulting in a slow purchasing pace for forward shipments," a buyer in China said. Approximately 2.3 million mt or 31% of China's total projected soybean demand of 7.5 million mt for June shipments had been covered as of April 20, market sources said. At the same time last year, 100% of projected June requirements had been covered. This implies that the remaining 5.2 million mt could be covered in the next six weeks, as purchasing typically averages 15 cargoes/week. "However, buyers are not showing sufficient buying interest to support the purchasing expectation of 15 cargoes per week for June shipment," a trader in China said, adding that the open demand might not be completely covered, or total demand could be further reduced to 7 million-7.2 million mt. For July shipment, less than 20% of the open demand has currently been covered. "Buyers will continue to buy hand-to-mouth for nearby shipments," another trader in China said. Rebound possible in H2 Prior to the COVID-19 resurgence in China in Q1, industry sources had been expecting the country's soybean import volume to be higher over April-May. However, crushing demand was now expected to fall over Q2 due to COVID-related restrictions and seasonal lower demand from the feed sector. As a result, new soybean cargoes arriving will likely be stockpiled, enabling crushers to build up currently low soybean inventory levels, market sources said. According to a source at a Chinese state-owned buyer, crushers are currently reducing their crushing capacities to avoid losses, which will make the supply of soybean meal lower in August and September. Thus, the market generally expects soybean meal prices will be higher when supply tightens in Q3, applying upward pressure to domestic crush margins. Market sources in the feed-milling sector said farmers were currently reducing the number of hogs raised due to prolonged negative margins, which could support a margin increase in Q4. A better raiser's margin would in turn enable farmers to increase the percentage of soybean meal used in hog feed, potentially supporting demand for soybeans in Q4. "The demand for feed sectors will be recovered [in the second half of the year] and the restrictions could be lifted, inventory would start to be used up. Subsequently, the market purchasing pace could see a reverting trend," a major buyer in China said.

Argentina's corn production estimate has been revised upward to 49.17 million mt in 2021-22 from 47.7 million mt, the Rosario Grains Exchange, known as BCR, said in a report April 20. This comes after a fresh survey revealed that the planted area was higher than the initial estimates, according to the report. The 2021-22 corn crop will be marketed from March 2022 to February 2023. The BCR has pegged Argentina's total corn crop area at 8.42 million hectares for 2021-22, up from the previous estimate of 7.96 million ha. "There was no doubt that corn sowing was a record, but growth was estimated at 8% year on year. However, new data and analysis with satellite images are proving that it was much more: Argentina's (corn) area grew 14% compared to the 2020-21 cycle," the report said. Although corn area in 2021-22 is higher than the last year's level of 7.3 million ha, production is expected to be lower on the back of inadequate rainfall causing damage to the early corn crop and recent frost, which is expected to hit the late-planted corn crop. The corn harvest in the country so far continues to show lower values for the early corn crop. As corn crops in the south of Cordoba, La Pampa, and San Luis were hit severely by frost, yields are likely to be down, the BCR said. Argentina, one of the top three exporters, produced 52 million mt of corn in 2020-21, according to the BCR. Argentina remains a crucial supplier of the cereal as the global buyers wait for the new corn crop from Brazil, the second-largest exporter, to hit the market in July. In the US, which is the top exporter of corn, farmers are currently focusing on corn planting, and the marketing activity takes a back seat usually around this time.

Illinois extended the current tax exemption on sales of B10 biodiesel until 2023 with passage of a new law, which will also increase the biodiesel blend level subject to the tax exemption incrementally through 2026, according to an April 20 statement from the Clean Fuels Alliance. The Illinois law currently in place gives biodiesel retailers a 20% exemption of the state's 6.25 % excise tax for selling blends containing between 1% to 10% of biodiesel. The new bill signed into law by Illinois governor J.B. Pritzker will keep that sales exemption in place through 2023, and then increases biodiesel blend levels subject to the tax exemption to B13 in 2024, B15 in 2025 and B19 in 2026. "This innovative tax exemption program in Illinois, which has been in place since 2003, has drawn hundreds of millions of gallons of biodiesel into the state. This modification, signed by Governor Pritzker today, will expand that demand and solidify Illinois as a leading source and user of better, cleaner biodiesel," said Clean Fuels CEO Donnell Rehagen in the statement. The legislation was spearheaded and guided through the legislative process by the Illinois Soybean Association (ISA) with support from Clean Fuels Alliance America and several of its member companies, including Archer Daniels Midland and Renewable Energy Group, to increase use of biofuels and reduce greenhouse gas emissions. Soybean consumption and production Illinois is currently fourth among all states in biodiesel production and third in consumption with 160 million gallons consumed annually, according to the statement. Energy Information Administration data showed Illinois biodiesel production of 174 million gal/yr in 2021. Illinois also ranks among the biggest producers of soybeans in the country. US Department of Agriculture data showed the state to be the largest producer of soybeans in 2021, producing 672.6 million bushels. Demand for biodiesel is being supplanted by demand for renewable diesel, which has the same chemical structure as petroleum diesel. While both are made from renewable sources which include used cooking oil, beef tallow, and soybean oil, RD burns more cleanly than biodiesel because it does not have to be blended with a petroleum product. The new law will help keep more soybean oil in-state to be processed at Illinois biodiesel refineries rather than shipped out-of-state to renewable diesel and sustainable aviation fuel producing facilities. As of 2021, the state also had four biodiesel plants, down from the five it had in 2020, according to the EIA. The supply of soybean oil remains tight as new RD and SAF projects come online, with one of Illinois' five biodiesel plants shutting down in 2020, as soybean oil prices soared. CBOT soybean oil futures are averaging 75.2 cents/lb so far in Q2 2022, up from the 58.14 cents/lb and 31.3 cents/lb in 2021 and 2020, respectively.

Everything can be politicized, except food. This holds more relevance amid widespread protest and collective boycott calls against Russia's invasion of Ukraine since Feb. 24 . With hundreds of multinational companies exiting Russia, pressure is mounting on major agricultural trading companies to follow suit. But is it too much of an ask? Probably. The Big 4 of world agriculture – also called ABCDs – namely Archer Daniels Midland (ADM), Bunge , Cargill , and Louis Dreyfus are not expected to leave Russia, at least not in the short-term, analysts told S&P Global Commodity Insights. Speculations of the Big 4 leaving have been rife in the market since the companies announced “downsizing of operations” in Russia. Louis Dreyfus was the first of the four entities to halt its business in Russia in early March, before Bunge announced the suspension of any new export business from the country. On March 11, ADM and Cargill released statements signaling scaling back of their businesses in compliance with the EU sanctions. Infographic: Sanctions on Russian energy and commodities explained However, some analysts think that linking downsizing of operations with eventual departure from the country is too far-fetched. “It is almost unthinkable that major agricultural companies will totally exit Russia as that will mean cutting-off the region’s prime food supply source,” a New York-based analyst said. To say that Russia’s grains supply is vital to satiate world hunger could well be an understatement. As a transcontinental country spanning Eastern Europe and Northern Asia, Russia is a major global food supplier and world’s top exporter of wheat, a stable crop for almost everyone on the planet. It also holds significance in global trade of sunflower oil, corn, barley, poultry meat, beef and chocolate confectionery products. Commodity analysts see a definite trend: agricultural majors are adopting a prudent stance by weathering the storm and waiting for tensions to diffuse in the Black Sea region Global agricultural companies have played a big part in Russia’s resurgence as one of the world leaders in food supplies. Through their sizable investments, including crushing plants and grains infrastructure, and extensive supply-chain network in Russia, the ABCDs have been an integral part of Moscow’s food supply dominance. So, the question of leaving all that behind must be tricky for these trading majors. Soaring prices and profits Calls for boycotting Moscow comes at a time when commodity prices have soared to rare peaks, generating tremendous profits for the agricultural trading houses. Skyrocketing demand coupled with drought since 2020 in key producing regions of the world, such as South America and Black Sea, created a perfect storm for commodity prices to spike. And then, Russia’s invasion of Ukraine happened, which only escalated the tight supply-led price rally to an entirely new level. Russia commands a significant chunk in global agriculture trade flow, especially for wheat and sunflower oil. For both these commodities, Moscow accounts for roughly 20% of global trade. Ukraine is no slug either. It is one of the leading shippers of wheat, corn and sunflower oil, among others. The ongoing geopolitical tension between these two leaders of global food trade clearly reflects on the price upsurge. According to S&P Global, FOB Black Sea wheat (Russia, 12.5%) was assessed at $405.00/mt on April 12, up 68% on the year, while sunflower oil FOB Black Sea Ukraine (May) was estimated at $1869.50/mt, up 24% year on year. S&P Global assessed FOB Black Sea corn (Ukraine) at $334.50/mt, up 28% on the year. Will they ever leave? The Big 4 have been coy about their long-term intentions on Russia and have not given any indication of leaving Russia for good. In fact, they have justified their defiant presence in Russia on humanitarian ground of treating food as an essential commodity, bereft of politics and sanctions. Despite sustained pressure from international community, Cargill has vehemently clarified that it will continue with its essential food and feed business in Russia. “Food is a basic human right and should never be used as a weapon,” Cargill said in a statement March 11. “This region plays a significant role in our global food system and is a critical source for key ingredients in basic staples like bread, infant formula and cereal.” ADM had also made its intentions clear in persisting with production and transportation of essential food commodities and ingredients in Russia. Bunge, meanwhile, has decided to carry on its crushing business in the country, which almost exclusively serves local consumers. Interactive: Ukraine-Russia conflict shakes agriculture supply chains, raises food security concerns Commodity analysts see a definite trend of agricultural majors adopting a prudent stance of weathering the storm and waiting for tensions to diffuse in the region. “If any international agricultural company has operations, such as crush plants, inside Russia, we see no reason for them to quit,” said Terry Reilly, senior commodity analyst with Chicago-based Futures International, an exchange brokerage group. “Once the tension subsides, and rebuilding begins, these global companies will again become vital to the Black Sea trade.” Brian Splitt, technical analyst with St. Joseph, Missouri-based agro consultancy AgMarket.net , mirrored this viewpoint. “If the ultimate scenario of regime change [either in Russia or Ukraine] does happen, I could see western countries eager to resume full operations in the Black Sea region,” Brian said. “It’s a very fertile breadbasket and business opportunities are high.”

Canadian common wheat exports fell by over 64% on the week to 67,400 mt in the week ended April 10, data released April 18 by Canadian Grain Commission showed. Common wheat exports for the marketing year 2021-22 (August-July) through April 10 fell 42% on the year to 7.9 million mt. Exports of the food grain fell in the week ended April 10 as Canadian wheat prices started to increase amid continued uncertainty over trade prospects from the Black Sea region and drought conditions in the Prairies, traders said. Canada's durum wheat exports in the week ended April 10 fell to 42,900 mt from 53,600 mt in the previous week, the data showed. Durum wheat exports over Aug. 1, 2021-April 10 totaled 1.7 million mt, down nearly 60% year on year. In MY 2020-21, Canada exported a total 26.4 million mt of wheat. However, exports have been poor during MY 2021-22 amid a lack of surplus due to poor output. In its March update, Agriculture and Agri-Food Canada estimated the country's wheat exports at 15.5 million mt in MY 2021-22. In MY 2021-22, Canada is likely to harvest 21.7 million mt of wheat, down from 35.2 million mt the year before, AAFC said. The wheat output in MY 2021-22 is seen to be the lowest in over 14 years due to a warm and dry summer. Export prices see fall Export prices of Canadian wheat fell in the week to April 15 after gradually gaining over the past two weeks. According to traders, receding drought conditions in key wheat-growing regions were seen to be affecting prices. However, overall prices remained over 4% higher month on month. According to data from S&P Global Commodity Insights, 13.5% Canadian Western Red Spring wheat, FOB Vancouver, for 30-45 days forward was assessed at $459.48/mt April 14, down $7.17 on the day. The 13.5% CWRS wheat, FOB Vancouver, for 45-60 days forward was assessed at $462.15/mt, down $6.34/mt on the day. The ongoing war between Russia and Ukraine is expected to support Canadian wheat export prices over the next few weeks, traders added. Russia and Ukraine's combined wheat exports during the 2021-22 marketing year are estimated to account for 26% of the global trade, according to the US Department of Agriculture. However, poor demand from buyers amid higher prices may dent exports in the near term, a Vancouver-based trader said. The lack of exportable surplus in Canada might also limit its shipments, he added.

War-torn Ukraine is increasingly reliant on fuel supplies via truck from Poland following the destruction of up to 20 major fuel depots, damage to its main refinery, and the cutting of Black Sea shipping routes, Ukrainian experts say. Russia's military assault on northern Ukraine has abated in recent days, but as the focus of military activity shifts to the east, the country faces increasingly stretched fuel supply, Serhiy Kuyun, head of the A-95 fuel consultancy, told S&P Global Commodity Insights. Ukraine has long been shifting away from Russian energy and previously took Azeri crude by sea for the Kremenchuk refinery and diesel from northern neighbor Belarus. It also hosts the Odesa-Brody pipeline from the Black Sea into Central Europe. But the Russian invasion meant cutting supplies from Belarus, which has supported Moscow, and Black Sea security risks and a Russian blockade have stopped shipments from Azerbaijan and Romania, the latter previously a source of fuel supply by sea. With crucial infrastructure now damaged and the geography of the Carpathian Mountains preventing supply from other neighbors, Ukraine is now largely dependent on Poland; the latter is in the process of merging its two main refineries under PKN Orlen, which also operates Lithuania's Mazeikiai. "The market has not stopped, but it has been forced to adapt," Kuyun commented in a statement. "There are no stocks of fuel anymore. We're selling as soon as fuel tanker truck arrives." In the course of March, Russia's navy targeted fuel depots across the country, including in Lviv, Lutsk, Ternopil, Rivne, Zhytomyr, Odesa, Poltava, Kyiv, Chernihiv, Kharkiv and Dnipro. Then on April 2 the 240,000 b/d Kremenchuk refinery was badly damaged in a Russian missile attack, putting it out of action, according to regional and company officials. Ukraine's second refinery, the Shebelinka Gas Processing Plant in the east of the country, was taken offline Feb. 26 due to the threat of shelling. Kuyun added that the stricken fuel depots were mostly full early in March, with later attacks coming when stores were already depleted. The country now faces not only a shortage of fuel, but a squeeze on trucks available for bringing in fuel, he said. "More fuel trucks are needed that can bring fuel directly from abroad," Kuyun said. "It is necessary that every owner of a fuel tanker truck has the opportunity to go and buy fuel." Ukraine's government is also liaising with state railroad company Ukrzaliznytsia to make sure supplies can also come by rail. Price liberalization Kuyun advised the government should cancel price controls and lift restrictions on maximum gasoline and diesel retail prices to encourage private traders to import more. "I know of three regional fuel chains that have already stopped selling fuel in the last two days because the cost is higher than the set prices," he said. "Even large players are forced to limit sales, because new batches of fuel arrive at the pump, but its cost is already beyond the established price corridor." The Ukrainian parliament on March 15 cancelled excise tax on all kinds of fuel and lowered VAT to 7% from 20% on imports of gasoline and diesel fuel. The lower taxes create an incentive for private fuel suppliers to arrange more supplies and help to reduce prices at retail stations. The government also ordered the state customs service to remove bureaucracy from customs clearing of fuel imports. Planting season While the turmoil of war and a flow of refugees out of the country will have impacted demand, the lack of refining capacity also poses a challenge for the vital grain sowing season — Ukraine being an important source for global grain markets. Ukraine is likely to reduce the area planted with grain crops by up to 30% because of fighting in eastern and southern regions, in turn reducing the demand for fuel, according to the government. In 2021, Ukraine imported 8.79 million mt of petroleum products, up 9.6% from 8.02 million mt in 2020, according to the state customs service.

High supply prices and low freight availability have hindered the number of refined products cargoes that Latin American entities are receiving, especially for distillates. Sources said that Argentina's Cammesa in the week ending April 9 only awarded three cargoes of a five-cargo tender of high sulfur diesel and three cargoes of fuel oil out of a seven-cargo tender for fuel oil, with delivery starting in May. Last week, Petroperu was heard to have awarded only seven out of the 11 cargoes it had requested for diesel and biodiesel. Smaller tenders have been canceled or reduced as well, but requests are hitting the market again. In late March, Petroecuador broke a month-long dry spell for big Latin American tenders, awarding 1.96 million barrels of 50 ppm premium diesel in seven cargoes to Glencore, but the state oil company paid a $7.45/b premium, compared with discounts in the previous two tenders. Petroecuador has unveiled another similar tender, due April 18. "People are not liking the price," a trading house source said. "With freight rates at all-time highs, people are awarding front volumes and hoping for better values in the back." It's not just the open tenders, either. The Russian invasion of Ukraine has pulled more US Gulf Coast ships to Europe to offset Russian diesel supply. So, offers are also harder to find for diesel markets from Mexico to Brazil that don't advertise through tenders. "We're in the market this week to buy for May delivery," a Brazil source said. "But the number of offers is much lower than last year." Despite record high diesel prices in Latin America and elsewhere, the Brazil source said demand remains very strong. Brazil had a greater dearth of cargo offers in March, but has been able to find them in April, although not always from the US Gulf Coast, the default source for distillates. "Yesterday, we heard some barrels came to Europe and for a short period of time Europe became long and we had an opportunity to take barrels from them," the source said. "We market is really tight. But we are seeing the arb [arbitrage] open from Europe and PG [Persian Gulf] and India. We are getting successful so far." "It's the opposite in Argentina," he added. "In Argentina they were suffering." Cammesa, the Argentinian wholesale power administrator, was heard to have awarded PetroChina two cargoes and Vitol one cargo of the reduced HSD tender. Argentina had been asking for more tenders than seen in years to restock after meeting power needs due to record temperatures. But the country is also in need of ULSD supply, with a trade group citing rationing at service stations ahead of the spring harvest due to reduced imports because local price controls keep pump prices 30% lower than import prices.

Asia’s carbon markets are on a trajectory of rapid growth as demand for carbon offsets rises and regional governments work towards net-zero commitments. While turmoil in global energy markets has temporarily shifted attention to energy security, commodity trading hubs like Singapore are pushing ahead with plans to become a carbon trading powerhouse. Eric Yep and Roman Kramarchuk of S&P Global Commodity Insights discuss with Mikkel Larsen , CEO of Climate Impact X, a Singapore-based carbon exchange, on what lies ahead for Asia's carbon markets. More listening options: No content (including ratings, credit-related analyses and data, valuations, model, software or other application or output therefrom) or any part thereof (Content) may be modified, reverse engineered, reproduced or distributed in any form by any means, or stored in a database or retrieval system, without the prior written permission of Standard & Poor's Financial Services LLC or its affiliates (collectively, S&P).

The European Union’s structural deficit in corn has been highlighted by Russia’s invasion of Ukraine, its main source for imports of the feedgrain, said agricultural consultancy Tallage, which expects the resultant destocking to reduce the region’s stocks to their lowest level since 2013. “There is a structural deficit of 13.5 million mt on average between domestic supply and demand,” said Benoit Fayaud, grain and crop analyst at Tallage. In slides that were circulated March 29, Fayaud noted that the EU’s pigs, chicken, sheep and cows will consume a combined 131 million mt of feed grains in 2021-22. Corn’s share of the European Union feedgrain market has grown to 44% in the 2021-22 marketing year from 35% in the 2009-10, Fayaud told an audience in Paris on March 23. By contrast, the share of feed wheat and barley has fallen to 32% and 25% respectively. The EU produced 65 million mt of corn in the 2020-21 marketing year (October to September) and required 56 million mt to feed its livestock and an additional 17.7 million mt going for ethanol, corn starch and human consumption. Related Interactive: Ukraine-Russia conflict shakes agriculture supply chains, raises food security concerns Prior to Russia’s invasion, Ukraine had been expected to provide just over half of the EU’s 14.7 million mt in corn imports for the 2021-22 marketing year, according to Fayaud. While shipments between EU countries were seen at 18.1 million mt, primarily from Poland, France, Romania, Bulgaria and Hungary to Spain, Portugal, Benelux Germany and Italy. The closure of Ukraine’s ports will boost those intra-EU shipments, leading to a decline in stocks from 3.8 million mt at the end of September 2021 to 3.2 million mt at the end of September 2022, Fayaud said. Given the absence of Ukrainian imports, Tallage has raised its estimate for this marketing year’s imports into the EU from North America, Brazil and Argentina. It now expects the EU to take 7 million mt from those origins, compared to its earlier estimate of 5.5 million mt. The call on South American supplies has raised additional challenges for importers in the EU, where there are restrictions on the use of genetically modified corn. The majority of Argentina’s production is genetically modified. Spain’s agriculture minister on March 9 appealed to the EU to relax its import controls, and the country has temporarily relaxed restrictions on residues from pesticides that are commonly used in Argentina.

S&P Global Commodity Insights has launched the following Indian rice weekly assessments, effective March 25, 2022. Buyers have increasingly shown a preference for steam and parboiled Basmati over white Basmati due to its longer grain length, cooking quality, taste and fragrance. 1509 Basmati has also become increasingly popular amongst buyers and farmers, who have chosen to plant 1509 Basmati over other varieties in recent years. 1509 Parboiled Basmati 2% broken 1509 Steam Basmati 2% broken 1121 Steam Basmati 2% broken Pusa Steam Basmati 2% broken Sharbati steam 2% broken Please send all comments, feedback and questions to europe_ags@spglobal.com and pricegroup@spglobal.com . For written comments, please provide a clear indication if comments are not intended for publication by S&P Global for public viewing. S&P Global will consider all comments received and will make comments not marked as confidential available upon request.

Russia's invasion of Ukraine has triggered an unprecedented wave of sanctions against Moscow which are rippling through global commodity markets. In addition to official sanctions which continue to evolve, major self-sanctioning by industries looking to cut ties with Russia have deepened the market impact. Click here to see the full size version

S&P Global Commodity Insights has launched a daily global soybeans arbitrage price matrix, to reflect the competitiveness of each major export origin delivered into China, the world's largest soybeans importer.The price matrix reflects the replacement values and profit margin calculations, in USD, associated with the import of soybeans from the US Gulf Coast and Brazil at destination in North China.As the world's largest importer of soybeans, China imports more than 60% of soybeans traded worldwide, or 95 million mt of soybeans on average over the last five years.The soybeans arbitrage price matrix reflects replacement and profit margin calculations twice a day, first at 16:30 Singapore time, in line with the Market on Close timestamp of the existing SOYBEX CFR China assessment and at 17.30 Sao Paulo time in line with the Market on Close timestamp of the existing SOYBEX FOB Santos assessment.As part of this matrix, S&P Global uses the following existing assessments:1. SOYBEX CFR China (M1) - SYBAB002. Soybeans CFR China basis (M1) - SYBAA003. SOYBEX FOB Santos - SYBBB004. Soybeans FOB Santos basis - SYBBA005. SOYBEX FOB New Orleans - SYBBI006. Soybeans FOB New Orleans basis - SYBBJ007. Freight route PP26. Santos, Southeast Brazil to Qingdao, North China - GRSQC008. Freight route PP35. New Orleans, US Gulf Coast to Qingdao, North China - GRNOQ00S&P Global has also launched the following net forwards and margin calculations1.1. Brazil CFR China Soybeans Replacement Asia close:Is calculated in cents/bushel at Asian close by adding the overnight SOYBEX FOB Santos basis assessment to the freight assessment PP26 Santos, Southeast Brazil to Qingdao, North China1.2. US Gulf CFR China Soybeans Replacement Asia close:Is calculated in cents/bushel at Asian close by adding the overnight SOYBEX FOB New Orleans basis assessment to the freight assessment PP35 New Orleans, US Gulf Coast to Qingdao, North China1.3. Brazil CFR China Soybeans Replacement Americas close:Is calculated in cents/bushel at Americas close by adding the overnight SOYBEX FOB Santos basis assessment to the freight assessment PP26 Santos, Southeast Brazil to Qingdao, North China1.4. US Gulf CFR China Soybeans Replacement Americas close:Is calculated in cents/bushel at Americas close by adding the overnight SOYBEX FOB New Orleans basis assessment to the freight assessment PP35 New Orleans, US Gulf Coast to Qingdao, North China1.5. Quality spread with Brazil:Reflects the quality spread of Brazilian origin soybeans versus US Gulf origin soybeans.1.6. Normalized Brazil CFR China Soybeans Replacement Asia close:Is calculated in USD/mt at Asian close by adding the overnight SOYBEX FOB Santos assessment to the Brazil-US quality spread and freight assessment PP26 Santos, Southeast Brazil to Qingdao, North China1.7. Normalized US Gulf CFR China Soybeans Replacement Asia close:Is calculated in USD/mt at Asian close by adding the overnight SOYBEX FOB New Orleans assessment to the Brazil-US quality spread and the freight assessment PP35 New Orleans, US Gulf Coast to Qingdao, North China1.8. Normalized Brazil CFR China Soybeans Replacement Americas close:Is calculated in USD/mt at Asian close by adding the overnight SOYBEX FOB Santos assessment to the Brazil-US quality spread and the freight assessment PP26 Santos, Southeast Brazil to Qingdao, North China1.9. Normalized US Gulf CFR China Soybeans Replacement Americas close:Is calculated in USD/mt at Asian close by adding the overnight SOYBEX FOB New Orleans assessment to the Brazil-US quality spread and the freight assessment PP35 New Orleans, US Gulf Coast to Qingdao, North China1.10. Brazil CFR China Soybeans Margin Asia close:Is calculated at Asian close from SOYBEX CFR China assessment minus the Normalized Brazil CFR China Soybeans Replacement Asia close.1.11. US Gulf CFR China Soybeans Margin Asia close:Is calculated at Asian close from SOYBEX CFR China assessment minus the Normalized US Gulf CFR China Soybeans Replacement Asia close.1.12. Brazil CFR China Soybeans Margin Americas close:Is calculated at Americas close from SOYBEX CFR China assessment minus the Brazil CFR China Soybeans Replacement Americas close.1.13. US Gulf CFR China Soybeans Margin Americas close:Is calculated at Americas close from SOYBEX CFR China assessment minus the US Gulf CFR China Soybeans Replacement Americas close.Please send any feedback, questions or comments on the soybeans arbitrage price matrix to ags@spglobal.com and pricegroup@spglobal.com .For written comments, please provide a clear indication if comments are not intended for publication by S&P Global for public viewing. S&P Global will consider all comments received and will make comments not marked as confidential available upon request.