Written Commentary
London Wheat Report
Source: FutureSource
Wheat markets turned bullish today with Chicago Mar-22 trading up 23 cents at time of writing. Forecast for the US Plains remains concerning with La Nina now expected to continue well into Apr-May. US weekly exports have surged by 58% to 369,188t USDA data showed today. Turkey has bought 335kt of 12.5% – 13.5% wheat at $347.16/t c&f. Japan has issued a tender for 72kt of US and Canadian wheat. Russia’s 2022 wheat crop has been pegged at 82.4Mmt by UkrAgroConsult, up from 75.3Mmt this season. This would bring Russian wheat exports up to 38Mmt versus 32Mmt this year. Russian wheat is said to be in ‘exceptionally good condition’ this year. It was confirmed that France had not participated in Friday’s Algerian tender for 600kt of wheat. EU wheat still looks good value against Black Sea. Importer demand continues to be the primary focus point. The CEO of Divella, Italy’s second largest pasta producer, has warned that pasta prices will increase by 38% due to rising input costs. London wheat followed global markets higher.
USDA announced the sale of 239kt of beans to Mexico today. Market chatter continues regarding the size of the Argentinian soybean crop – will it be 41-42Mmt or 46-47Mmt, majority of trade anticipate somewhere in between. Brazil’s soybean harvest has hit 1.7% harvested as Conab reports yield losses. Matif rapeseed pulled back with Feb-22 settling down €26.25 on yesterday at €737.25/t. Brent crude hit 7 year highs in today’s trading as tight supplies bite, hitting a trading high of $88.13/barrel.
China is reported to be looking to curb purchases of US farm goods according to Fitch. With relations remaining strained, Beijing is reportedly continuing to diversify its imports of agricultural products and keep America’s share low. Not the answer the US was wanting to hear regarding the Phase 1 deal. Will have to watch this space to see how it plays out. Chinese pork production jumped 29% year on year in 2021 to 52.69Mmt as the number of live hogs increased according to the statistics bureau. Chinese imports of corn have also soared to new records in 2021 with volume nearly tripling from the previous year. 2021 imported volume hit 28.35Mmt, up from 11.3Mmt in 2020 according to Chinese customs data.
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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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