ADMISI London Wheat Report for 18 October

*Close price is the last traded price at time of report

Source: FutureSource 

US ag markets have started the week supported, following Friday’s bullish session. Wheat cooled off slightly to begin before regaining. Egypt’s state grain buyer GASC cancelled  a tender last week for Nov/Dec delivery and Pakistan’s state grain buyer cancelling a 90kt and reissuing a fresh tender after being unsupportive of the prices provided. This is not to say that tenders are stopping, as Ethiopia has issued a fresh 400kt wheat tender today. Basis levels remain elevated and some hedging pressure is showing up as the latter half of harvest progresses. Cash flow will be a crucial factor for some. Chicago Dec-21 was trading up a couple of cents and Kansas Dec-21 was trading up four cents at time of writing.

European markets pulled back, following the states and with little market news to propel the bulls. Matif set record highs on Friday after the Chinese rumours fuelled the trade. Market is still expectant of China taking some additional boatloads of feed wheat this week, let’s see if this proves correct. EU shipments continue at pace, both milling and feed wheat. Russian export prices have risen to a nine-year high according to Sovecon. Prices for 12.5% protein deep-water Russian ports rose by $6 to $312 FOB, the highest level since August 2012. Sovecon have also issued the first 2022 Russian wheat crop forecast, an estimated 80.7Mmt. Production is set to rebound on good winter weather and a lower winter kill rate thanks to more winter wheat and less spring wheat. Matif Dec-21 settled down €2.00 on Friday’s close at €274.00/t and May-22 settled down €1.00 at €264.75/t.

London wheat prices have followed Paris, cooling off today and settling lower. Transport remains a key issue alongside farmers holding back for higher prices. As mentioned previously, with winter drilling in full swing, cash flow positions will be a crucial factor with some farmers deciding to sell to maintain a healthy position, especially if forward buying fert at current prices. ICE have released the London wheat stock figures for the balance of grain held in store which can be found here https://www.theice.com/marketdata/reports/174 as we approach the first notice day this Friday (22/10.21).  Nov-21 settled down £1.50 on Friday at £207.00/t and May-22 settled down £0.35 on Friday at £214.90/t.

Canola and Matif rapeseed continue to find support, on the back of high energy prices and a globally bullish veg oil market. Canadian canola Nov-21 was trading up 5 cents and May-22 was trading up 8 cents at time of writing. Matif Nov-21 rapeseed settled up €1.25 on Friday at €673.75/t and May-22 settled down €1.25 on Friday at €1.25/t. US soybean markets remain supported due to China being back on the scene and more purchases due after Friday’s buying spree. Chicago Nov-21 soybeans were up 6 cents at time of writing.

Contact the ADMISI Grains and Oilseeds Derivatives Brokerage team

Hanne Bell, Ryan Easterbrook, Dominic Enston, Aaron Stockley-Isted

Phone: +44 (0)20 7716 8477  or  +44 (0)20 7716 8140      Email: intl.grains@admisi.com

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© 2021 ADM Investor Services International Limited

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.

Futures and options trading involve significant risk of loss and may not be suitable for everyone.  Therefore, carefully consider whether such trading is suitable for you in light of your financial condition.  The information and comments contained herein is provided by ADMIS and in no way should be construed to be information provided by ADM.  The author of this report did not have a financial interest in any of the contracts discussed in this report at the time the report was prepared.  The information provided is designed to assist in your analysis and evaluation of the futures and options markets.  However, any decisions you may make to buy, sell or hold a futures or options position on such research are entirely your own and not in any way deemed to be endorsed by or attributed to ADMIS. Copyright ADM Investor Services, Inc.

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