Written Commentary
London Wheat Report
Source: FutureSource
USDA WASDE day today. Global outlook for wheat is stable supplies, decreased consumption, reduced exports and increased stocks. Production has been upped in Argentina and the EU offset decreased production in Brail and Paraguay alongside lower beginning stocks for Russia. Global wheat consumption for 21/22 is lowered by 1.9Mmt to 787.5Mmt primarily due to lower feed and residual use for the USA. Russian wheat exports are projected at 35Mmt, reduced by 1Mmt and EU exports are raised 0.5Mm to 37.5Mmt. Projected world ending stocks are raised 1.8Mmt to 280Mmt with increases primarily for the USA, Russia, Kazakhstan and Argentina. Chicago wheat dropped further post release, with Mar-22 trading down 12 cents at time of writing. Matif Mar-22 wheat settled down €5.50 on yesterday at €271.25/t. London wheat followed global markets lower with May-22 settling down £0.00 on yesterday at £0.00/t. Reuters dropped 2022/2023 Russian wheat production down by 2% to 85.3Mmt. FranceAgriMer has cut French export wheat outlook to 9Mmt, down 200kt from the previous report.
USDA has forecast global corn production 1.6Mmt lower to 1,500.1Mmt. Declines have been seen for Brazil, Argentina, Kenya and Mexico alongside the EU and Paraguay, partially offset by an increase in Ukraine. Argentinian and Brazilian dryness in December have been major factors, especially in the critical growth phase. Global stocks are down 2.5Mmt at 303.1Mmt, mostly reflecting reductions for Brazil, Argentina and Pakistan. Greater corn exports forecast for Ukraine, Pakistan and Tanazania with a reduction for Paraguay. Chicago corn Mar-22 was trading down 4 cents at time of writing.
US oilseed production is estimated at 130.6Mmt for 21/22 season. Us season average price for 2021/22 is forecast at $12.60/bu, up 50 cents. 2021/22 global soybean outlook includes lower production, crush, exports and stocks. Foreign soybean production is lowered 9.5Mmt on reduced crops for Brazil, Argentina and Paraguay. Brazil’s soybean crop is lowered to 139Mmt reflecting drought in Dec and early January in southern brazil. Argentina’s crop is reduced 3Mmt to 46.5Mmt on both lower area and yield. Paraguay us down 1.5Mmt. Global soybean stocks are reduced 6.8Mmt to 95.2Mmt on lower stocks for Brazil and Argentina. Malaysia has had palm oil production reduced and high rapeseed production for India on faster planting basis. Matif Feb-22 rapeseed settled down €16 on yesterday at €779/t.
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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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