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ADMISI London Wheat Report for 28 January

London Wheat Report

Source: FutureSource 

Ag markets found support today with US oilseeds leading the charge. South American production concerns combined with new contract highs continuing for palm oil values alongside strong brent crude prices allowed Chicago soybeans to push forward with Mar-22 trading up 22 cents at time of writing. Energy markets continue to be buoyant, Brent crude was up over 2% earlier today, hitting a trading high of $91.70/barrel and there does not seem to be a significant break on the horizon for these markets. Wild card for beans is whether or not the US picks up additional business. Confidence in South American weather shift is fading and it looks like precipitation has the potential to be better than it has been, but overall coverage remains questionable. USDA announced bean sales today of 264kt to China, 141,514t of old bean to Mexico and 251.5kt of old beans to unknown. Matif rapeseed found additional support also on the back of this.

 

Egypt’s GASC returned to the market today for an unspecified amount with the lowest offer believed to be French wheat offered at $325.86/t FOB according to initial assessments. Russian government is reducing wheat export tax again for next week, dropping $1.90/t from $95.8/t currently to $93.9/t from next week. No significant frost damage to report across EU wheat crops with conditions looking pretty good. The situation is less encouraging in North Africa. MARS has reported that crops in Morocco are facing persistent drought and rain is needed imminently in western and central Algeria. This signals the potential for increased wheat import needs next season.

 

Black Sea issues rumble on. Rhetoric between Russia/Ukraine has been cooling a bit, US does not seem to want to let it go. EU has supposedly threatened to cut off their own potential imports of natural gas if Russia makes a move. Interesting strategy there to say the least! Market chatter leads to Black Sea shippers implementing a war clause on sales. Freight appeared to be down prior to the GASC tender. EU banks do not seem to be overly keen to be financing trade out of the Black Sea. Ukraine and Russia account for 30% of the world’s wheat export trade and until a diplomatic solution can be found rather than the second option of Russian tanks tearing across the Ukrainian plain, volatility will continue. London wheat gained support, settling up on last night.

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

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© 2022 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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