Written Commentary
London Wheat Report
Source: FutureSource
A bullish day on the ag markets following Turn-around Tuesday. Wheat continued to power ahead after yesterday’s fresh buying after the market oversold. Buying spilled over into corn with the rally in crude continuing. Cold weather news refers to crop being threatened in dry parts of the US also helped support prices. Russian troop movements continue to excite the media who are gunning for all-out war in Ukraine. Russian lawmakers have also called on parliament today to make an appeal to President Putin to recognise the two pro-Russian breakaway regions in eastern Ukraine as independent states according to Reuters. Main news headlines today remain on finding a diplomatic solution to resolve the tensions (sign off Nordstream 2 maybe?) US wheat demand remains disappointing but global demand is coming back online. Jordan has issued a new tender to buy 120kt of wheat and Iran has issued a 60kt of wheat. Dry bulk rates continue to drop ahead of Chinese New Year holiday. European temperatures are dropping below normal, particularly in the Balkans where snow cover is limited. Russian and Ukrainian snow cover is generally perceived to be adequate. Matif Mar-22 wheat settled up €7.00 on yesterday at €274.75/t London May-22 settled up £5.50 on yesterday at £219/t.
Beans also found continued support today with parts of Paraguay and Brazil still dry. Logistics issues along the Mississippi due to cold temps and Omicron also supportive. Brent continues to be supportive, last trading at $88.76/barrel – serious prices. Market reports coming through of some farming groups not being able to source an adequate supply of Diquat (herbicide mainly used as a desiccant to aid harvesting) from Syngenta who hold the rights in Brazil and wish to import from the global market. Not the opportune moment for a shortage. USDA’s local Brazilian office has slashed its outlook for the country’s soybean crop estimates to 136Mmt. Chicago Mar-22 soybeans were trading up 24 cents at time of writing.
Palm oil continues to find strength on the back of crude. Malaysian palm oil markets hit a second day of contract highs and to fresh 7-year highs. Indonesia is once again considering Rapeseed prices were also up again today with Matif Feb-22 rapeseed settling up €16.00 on yesterday at €753.25/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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