Morning All - This Russian Thing

12/10/11 -- Well, it's over to you the USDA. Second guessing what they will come up with has proven to be nigh on impossible of late, so I'm not even going to make an attempt.

Instead let's have a look at this Russian export duty thing that emerged from out of the woodwork yesterday. The nitty gritty seems to be this...they wish to cap grain exports at around 24 MMT for the marketing year. The plan seems to be to introduce export duties once that target is met. As they've already shipped 10.7 MMT that leaves 13.3 MMT left to go before that happens.

At current rates that means we will hit that target around the end of February. However that conveniently ignores the fact that Russian shipments normally slow up anyway once the worst of the winter hits.

Deputy PM Zubkov wouldn't be drawn on saying what form any duties would take to restrict exports. If they are meant to effectively cap exports then we can only assume that they would be fairly punitive.

So based on the information we have at the moment it may be fair to assume that Russia could be effectively hanging up the "sold out" sign for the last quarter (Apr/Jun) of 2011/12.

However that assumes that neighbouring Ukraine and Kazakhstan don't steal much in the way of export business from Russia. In the case of the former in particular that seems highly unlikely.

Ukraine have largely sat out of the export market up until now whilst they've been awaiting the removal of export taxes of their own. Now that they have, I think we can expect a much more aggressive showing from them as they try to cram their ambitious export target into what's left of 2011/12.

This announcement will also not have gone unnoticed by Egypt, who may well decide to re-evaluate it's recent stance of putting almost all of it's eggs back into the Russian basket.

Egyptian officials are said to have recently been in Ukraine in an attempt to iron out a three year dispute over grain quality, and Ukraine did undercut even Russia in a recent tender.

The next few Egyptian tenders will certainly be interesting.

Kazakhstan meanwhile have recently announced their intention to export 1.0-1.2 MMT per month of their potentially post-Soviet era record grain crop for what's left of 2011/12 too.

All in all I don't see that the Russian news is much of a game-changer, we just might start to see a few more different names on the score sheet in the second half of the season.