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ADMISI London Wheat Report for 20 December

London Wheat Report

Source: FutureSource 

Macro markets weighed pressure on grains while South American weather concerns support beans. Omicron is the main chatter of the day, with surging cases Europe wide and potential tighter curbs in Europe (Netherlands have gone into a full bore lockdown again until the 14th of January). US growth prospects have also dimmed after a $1.75 trillion domestic investment bill suffered a potentially fatal blow. Such great Xmas news, Grinch has obviously arrived early. Brent crude was down 5.24% on the day, last trading at $69.65/barrel at time of writing. Chicago wheat May-22 was trading up a cent at time of writing. Australian and Argentinian harvest is continuing to increase pressure on world wheat prices. Black sea prices are falling on the back of this. Russia now chatting about another recalculation on the wheat export tax, additional tax rises if prices hit $375/t and again if they hit $400/t according to the Ministry of Ag. Russian Bank VTB to spend $338m on new railcars for its Russian rail leasing business. Shortage of rolling stock is major area of pressure on Russian grain transit at the moment. Sabre rattling over Ukraine continues with additional requests put forward by Russia to Nato to stop the T90’s rolling across the border. Matif wheat followed Chicago with Mar-22 settling up €1.25 on Friday at €276.50/t. Algeria issued a tender to buy 50kt durum wheat for Feb delivery. 

 

An interesting announcement today was India’s market regulator ordering a year-long suspension of domestic futures trading in key farm commodities today. This is India’s most dramatic move since allowing futures trading in 2003, severely threatening market confidence by making hedging increasingly difficult at a time of record prices. India is the world’s largest importer of vegetable oils and a major producer of wheat and rice, struggling to tame food inflation.

 

South Brazilian and Argentinian growing conditions are the current worry in the soybean and corn world, especially the continuing drought. Mixture of high temperatures and heavy rains have the markets aware and continue to offer underlying support. Chicago soybeans continue to be supported from Chicago soymeal strength. Matif rapeseed prices were down today, with May-22 settling €0.75 down on Friday at €668.50/t. Brazil has confirmed 10% biodiesel blending mandate for 2022. Malaysian palm oil futures were down sharply as virus concerns trigger selling.

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

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

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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