London Wheat Report

Source: FutureSource
A mixed day on global ag markets to start the week. US and European wheat markets started lower before gaining support towards the end of the afternoon. US domestic cash markets remain supported. Ongoing story continues in tight major exporter milling stocks. Algeria and GASC are back in the market with new interest and Turkey has issued a 320kt milling wheat tender closing 21st Dec. Algeria retains favorable quality specifications of 1% maximum bug damage (which was increased in the November tender) which points towards Russian and Black Sea origin over French or EU. Russian wheat crop is anticipated to be 76.7Mmt according to IKAR, after drying and cleaning which is just under 11% down on the 2020 crop of 85.9Mmt. Russian 12.5% Black Sea FOB quoted prices have dropped down $3/t on last week to $334/t. Ukraine 2021 grain harvest is 98.6% complete at 84.17Mmt (wheat, barley and corn). Total grains exports are forecast to jump to 61.5Mmt 21/22 season compared to 44.7Mmt 20/21. Aus still on for a bumper crop, usual chatter about quality issues. Matif wheat Mar-22 settled up €0.00 on Friday at €2.75/t while London May-22 settled down £0.55 at £227.25/t.
Soybeans took a significant hammering today, with Chicago Mar-22 trading down 21 cents at time of writing. US S&D projections released by the USDA have remained unchanged. US bean exporters have missed out on Dec and Jan trade. Concerns about dry conditions on S Brazil and Argentina are mixed with some forecasters now looking to add moisture to previous dry conditions. Crude Oil is under pressure after OPEC+ and Russia failed to reach production quotas and agreed output levels. Stanlow Oil Refinery, located in Cheshire, has announced major investments over the next 3 years in its biofuels storage hub, the UK’s largest biofuels storage facility. An additional 300,000 cubic meters of capacity will be added to support initiatives including waste based feedstock import facilities, blending and additional capacity for existing bio-ethanol and bio-methanol. Malaysian palm oil futures are slightly down and Matif May-22 rapeseed settled down €2.75 on Friday at €662/t.
US corn export data release today once again fell short of the pace required to meet the US export target this season at 810kt. China has continued to avoid US corn and looks like it will continue to do so. China corn values remain firm, which indicates more need for corn. Some of the gap may be filled with feed wheat – especially from France and Aus if freight markets will permit.
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Risk Warning: Investments in Equities, Contracts for Difference (CFDs) in any instrument, Futures, Options, Derivatives and Foreign Exchange can fluctuate in value. Investors should therefore be aware that they may not realise the initial amount invested and may incur additional liabilities. These investments may be subject to above average financial risk of loss. Investors should consider their financial circumstances, investment experience and if it is appropriate to invest. If necessary, seek independent financial advice.
ADM Investor Services International Limited, registered in England No. 2547805, is authorised and regulated by the Financial Conduct Authority [FRN 148474] and is a member of the London Stock Exchange. Registered office: 3rd Floor, The Minster Building, 21 Mincing Lane, London EC3R 7AG.
A subsidiary of Archer Daniels Midland Company.
© 2021 ADM Investor Services International Limited.
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