Written Commentary
London Wheat Report
Source: FutureSource
Plenty of downward pressure on the market today. Macros lead the charge lower with key factory activity released today in Japan, UK, Eurozone and the US all softened in June. Germany triggers the ‘alarm stage’ of its emergency gas plan in response to falling Russian supplies Wheat harvest carries on rolling in the US with quality reported to be good alongside yields being better than expected. Ongoing chatter over a shipping corridor for Ukrainian grain and additional US pledges to help avert sanction repercussions on Russian food and fertiliser exports. Encouragement is continuing to purchase Russian fertiliser to try and cool input prices. Volatility is anticipated to continue in the coming weeks with weather conditions to be examined studiously over the coming weeks. Chicago Sep-22 was trading down 26 cents at time of writing. Bunge also announced that their grain terminals were damaged in strikes yesterday in Mykolaiv alongside Viterra’s. More chatter in the news that Russia is intending to lower the export tax through a change in formula to make Russian grain more competitive on the export markets. Interfax also reported that taxes for grains and sunflower will switch from the US dollar to roubles. SovEcon have reported that winter barley yields from Krasnodar region are hitting 7.4Mmt (19% YOY) .. a good indirect indicator of future wheat yield. Krasnodar is the 2nd largest Russian wheat growing region. London wheat Nov-22 hit a trading low of £276.30/t after a rogue single lot traded at that level before settling down £10.70/t on yesterday. MAtif Sep-22 settled down €11.50 on yesterday at €359/t. Corn received a hammering today, with Chicago Sep-22 trading down 36 cents at time of writing. A lower crude oil market alongside improving weather conditions has pushed corn lower for a second day. Moderate temperatures forecast into early July in the US Midwest have eased worries about crop stress following last week’s heatwave. Germany and the UK are also pushing for temporary waivers on biofuel mandates to combat soaring food prices when leaders from the G7 meet on Sunday according to Reuters. Matif rapeseed Aug-22 settled down €33 on yesterday at €661.75/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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