Share this page!

Alexander Stahel 🇺🇦 Profile picture
Twitter logo
Apr 22 • 5 tweets • 3 min read
Dollar Wrecking Ball - Brazil exports 55% of global #soybeans (mainly to China). Issue: US export 35% which seems to set international prices. That turns soybeans farming in Brazil into poor business at current potash prices ($1250/Mt) b/c of BRL-FX rate.

@WillisThomas Image
@ElenaNeroba @RussianGrainTra @YETICapital99 @UrbanKaoboy
Same for corn. BRL exports 21% of total, ARG 20%, US 32% while setting prices. LatAm farmers need fertiliser subsidies or use less which would reduce yields & worsen ongoing food crisis. What do I miss? Stocks? Labour cannot move dial. Below BRL, worse for ARS.

@Fernand89000071 Image
Less of a problem for ARG but certainly for Brazil's soybeans 2nd crop season with planting in April & Mai as well as wheat. Image
Global context: 3 fertilisers-corn ratio (same for soybeans) are within "affordable range" (not to be mixed up with end-consumer corn price).
My point: farmers in US & EU (EU is corn "self-sufficient") are fine (ex energy). LatAm not but = up to 50% of exports.

@WillisThomas Image

• • •

Missing some Tweet in this thread? You can try to force a refresh
　

Keep Current with Alexander Stahel 🇺🇦

Alexander Stahel 🇺🇦 Profile picture

Stay in touch and get notified when new unrolls are available from this author!

Read all threads

This Thread may be Removed Anytime!

PDF

Twitter may remove this content at anytime! Save it as PDF for later use!

Try unrolling a thread yourself!

how to unroll video
  1. Follow @ThreadReaderApp to mention us!

  2. From a Twitter thread mention us with a keyword "unroll"
@threadreaderapp unroll

Practice here first or read more on our help page!

More from @BurggrabenH

Alexander Stahel 🇺🇦 Profile picture
Apr 20
There have been 8 shocks to the global food prices - yes eight (8). Most of them are ongoing!

🧵

1/n As for team transitory,…
No 1 - War: Ukraine, which was known as the ‘breadbasket of the FSU’, has 1/4 of world’s ‘black soil’ fertile land. In 2021 Ukraine accounted for 20%, 7%, 18% of global exports of barley, wheat & corn, respectively. It is under attack & VVP wants this war to be a food crisis.

2/
He will get his will. The UN Food and Agricultural Organisation estimates that 20-30% of sunflower, grains and corn will not be planted or harvested. It forecasts food prices to rise by another 8-22% because of the loss of Ukrainian production (FT, 9 April).

3/n
Read 19 tweets
Alexander Stahel 🇺🇦 Profile picture
Apr 19
“Lower fertilizer use [b/c of higher cost] may mean a smaller crop. The International Rice Research Institute predicts that yields could drop 10% in the next season, translating to a loss of 36m tons of rice, or the equivalent of feeding 500m people.”
bloomberg.com/news/articles/…
“Rice farmers are particularly vulnerable. Unlike wheat & corn, which have seen prices skyrocket, rice prices have been subdued due to ample production and existing stockpiles.”

@WillisThomas @ElenaNeroba @RussianGrainTra
Urea prices are a derivative of ammonia prices which in turn are subject to natgas prices.

@DoombergT explained it nicely a while back.
Read 4 tweets
Alexander Stahel 🇺🇦 Profile picture
Apr 18
It’s important to listen to an educated bearish view in any trade & be able to justify why “the opportunity (crude >$100) exists.”

My view on Ed Morse’s bearish oil price outlook:

a) Bias: Ed is around since the 70ies & knows a thing or two but is bear since 2014/15;

1/4 🧵…
b) he doesn’t handicap US shale growth enough for diminished DUCs inventories or the constraint of capital, labour & supplies such as frac sand/rigs/pipes;

c) he underestimates the ongoing risk to OPEC exports in an already tight market (as seen for Libya in last 2 days);

2/n
d) he does not take the political will of the EU to ban Russian oil into consideration;

e) he ignores the logistical challenge to “smuggle or blend” Russian Urals into the EU market or the time lag it creates to reload for Asia (Aframax -> VLCC reloading);

3/n
Read 4 tweets
Alexander Stahel 🇺🇦 Profile picture
Apr 11
2022 outlook for oil is rock solid. Why? Crude prices of inventories incl reduced SPRs. In Q2 however, combo of SPR releases into seasonally weak demand + China lockdowns will calm short-term spreads & affect sentiment somewhat while curve went up at long-end vs 1 month ago.

1/4
But record Brent pricing in March meant barrels were already being drawn into Europe from all over the world to plug self-sanctioned Russian losses. Those now overlap with 1st tranche of SPRs announced in March, causing spreads to normalise (they may test contango briefly).

2/n
Meanwhile, EU losses of RUS imports will partly be redirectly into Asia but at significantly longer voyages. Overall, our base case remains unchanged & for up to 2mbpd of shut-ins as Russian storage fills & self-sanctioning continues. This seems to play out judging storage.

3/n
Read 4 tweets
Alexander Stahel 🇺🇦 Profile picture
Mar 31
The newsflow on Russian gas payments in past days remains confusing. My current interpretation of the situation and the status quo of the market...

1/n #TTF
On 23 March the Kremlin requested EU gas deliveries to be denominated in rubel. Putin said: “If these payments are not made [in rubel], we will consider it a failure of the buyer to fulfil its obligations, with all the ensuing consequences.”

2/n
 abcnews.go.com/International/…
Russia delivers 35% of EU gas of which 60% is paid for in € & rest in US$. Such are the contractual obligations. Therefore, all G-7 ministers agreed on Monday 28th that such a request would be "a one-sided & clear breach of the existing contracts.”

3/n
 ft.com/content/158ae4…
Read 12 tweets
Alexander Stahel 🇺🇦 Profile picture
Mar 18
It is called transition - not switch!

The oil market in 6 Tweets - rest is noise (I know, I like the rest too but it won’t matter for coming months).

1/n
#OOTT
Oil is an extractive industry. The industry needs to replace ONE North Sea each year (3mbpd) just to stay still (more in future due to base declines). That needs $600bn. Industry didn’t and does not invest it. Meanwhile demand is back at pre-Covid levels.

2/n
The world may draw another 2mbpd of liquids out of storage in 2022 (massive!) due to variety of factors - Russian sanction being a big one! And no, sanctions will not go away with a peace agreement. “West” will request check & balances after nuclear threads post VVP.

3/n
Read 6 tweets

Did Thread Reader help you today?

Support us! We are indie developers!

This site is made by just two indie developers on a laptop doing marketing, support and development! Read more about the story.

Become a Premium Member ($3/month or $30/year) and get exclusive features!

Become Premium

Don't want to be a Premium member but still want to support us?

Make a small donation by buying us coffee ($5) or help with server cost ($10)

Donate via Paypal

Or Donate anonymously using crypto!

Ethereum

0xfe58350B80634f60Fa6Dc149a72b4DFbc17D341E copy

Bitcoin

3ATGMxNzCUFzxpMCHL5sWSt4DVtS8UqXpi copy

Thank you for your support!

Follow Us on Twitter!

:(