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ADMISI London Wheat Report for 13 January

London Wheat Report

Source: FutureSource 

A very bearish day on global ag markets. US wheat futures continued their bearish sentiment post yesterday’s USDA report and extending the losses from yesterday. Iraq’s purchase of 150kt of Aussie wheat on the nominal tender of 50kt didn’t help the situation. Iraq reportedly paid around $447/t c&f according to trade news with USA/Canada and Australia originally being in line. Iran’s government trading corporation is believed to have purchased around 240kt of milling wheat on an initial 60kt tender which closed on Wednesday according to European traders. Wheat is thought to most likely be sourced from Russia or Germany. US and world exporter stocks were all raised and US winter wheat acreage came in above expectations to almost 1 million acres above last year. Matif wheat extended losses today to a three month low, pressured further by increased supply forecasts and concern over export competition as traders awaited results from the Algerian tender. Matif Mar-22 wheat settling down €5.50 lower on yesterday at €265.75/t. Grain exports have resumed in Rouen and a slow ramp up of exports has followed. London wheat followed global markets lower.

News has surfaced that the Biden administration is considering the 2022 ethanol blending mandate below the proposed 15bn gallons amid backlash from oil refining lobby and unions arguing the shrinking US ethanol industry can no longer support the target according to Reuters. Chicago soybeans took a hit in today’s trading after initial gains post report with Mar-22 soybeans trading down 22 cents at time of writing. Yesterday’s USDA report increased December US soybean stocks and reduced South American production due to weather conditions. Rains are forecast for next week for the South American soybean region. China’s push towards self-sufficiency on food and energy fronts continues with the specific desire to limit exposure and dependence on US supplies. The grand plan calls for a 19% bump in domestic soybean production.

Matif rapeseed has had one hell of a day. Front month Feb-22 hit a trading high today of €788.25 before crashing down and hitting a trading low of €735.25 before settling at €740.25/t, a whopping €38.75 down on yesterday’s settlement. May-22 very much followed, settling down €28.50 on yesterday at €699.50/t. It’s going to be an interesting time in the rapeseed markets.

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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