Written Commentary
London Wheat Report
Source: FutureSource
A substantial amount of whipping around on the ag markets today. Rhetoric from the leaders of both Russia and Ukraine are both countries are searching for peace and a potential cease fire although the howitzers continue to hammer down. Cargill and ADM have said they will scale back Russian operations, Olam said it will comply with all sanctions, laws and regulations, but Viterra said it will “continue to run its existing Russian operations” according to the article. Traders are continuing to assess 22/23 wheat and corn S&Ds and trying to assess various scenarios.
Russia today announced a total grain export ban that hit the news feeds around 11am from the Russian news agency Interfax. They then sent an updated headline at around 4pm saying that even though a ban will be in place, quotas will be introduced for certain volumes of exports. Classic Russian Ministry of Ag chat. Russia is gradually resuming wheat exports from its Black Sea terminals according to IKAR. Russia’s recent decision to suspend grain exports to some ex-Soviet countries is yet to be approved, but, Sovecon said, market participants already report unofficial restrictions for rail supplies of grain from Siberia to Kazakhstan. Restrictions for rail supplies of grain from Siberia to Kazakhstan. Russian wheat exports are down by 45.4% since the start of the 2021/22 marketing season on July 1 because of a smaller crop and an export tax that had been set at $86.3/t for March 16-22 (Reuters). Bayer has threatened to halt crop suppliers to Russia over the Ukrainian invasion.
Chicago wheat had a mixed day as did Matif. Matif wheat May-22 had a €24.25 spread in today’s trade with a trading high of €386.5 and a trading low of €362.25 before settling up €0.00 at €0.00. Turkey tendered to buy 270kt of milling wheat according to European traders. Iraq also issued a tender for 50kt of milling wheat for Apr-May delivery.
Brent crude cooled off today, last trading 5.6% down at $106.37/ba at time of writing. Russia has raised April sunflower oil export tax to $313/t, up from $260.1/t in March. Argentina halted export licenses on soyoil and soymeal until further notice. The general theory is that the restriction is temporary to prevent farmers from flooding the export market with the crop before export tariffs are increased. Both May corn and May soybeans were testing the 10-day moving averages overnight. Beans have really been stagnate over the last two weeks and haven’t settled outside of 1660-1690 during March. A break out of the range either direction could likely have legs. Spec interest (managed money + other) in soybeans is pretty long, but still 76k contracts from the high in September 2020.
Matif May-22 rapeseed settled down €6.50 on Friday at €898.25/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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