Written Commentary
Source: Future Source
US ag markets climbed higher in today’s trading. Wheat taking backing some of yesterday’s losses and soybeans turned higher after an earlier one-week low, some positioning taking place in the run-up to the USDA quarterly grains stock data that is due to be released on tomorrow. Analysts surveyed by Reuters expect the USDA to report Sept 1st corn stocks at 1.155bn bushels, below the 1.187bn bushels that the USDA projected in its last monthly supply/demand report on Sept 10th. A rise in the dollar index to its highest since last November has tempered US export prospects, although there have been signs of a recovery in shipments from the Gulf Coast following recent storm disruption. Rising prices from Russia and a run of tenders including the 550,000t booked by Algeria at a rumoured $377 c&f has lent support to wheat markets. Chicago Dec-21 was trading up 7 cents and Kansas Dec-21 was up 8 cents at time of writing.
European markets also gained on the back of bullish US sentiments and weaker domestic currency. Matif Dec-21 wheat rose to a trading high of €257.75 before settling up €2.00 on yesterday at €256/t. Cash focus continues on the Algerian tender to see the sources. EU premiums remain very tough to call for Nov-Dec and the 2022 positions due to the €6.25 Dec/Mar inverse. French port line up is adding in more Chinese vessels (not known whether loading milling or feed wheat) whilst the appearance of a 50kt vessel for the Philippines is a surprise. Russian export tax based on the past 3 days trade calculation is forecast to rise to $57 next week, but if any Russian wheat hit the Algerian tender, that tax will be above $70 by the time shipment takes place. Russian export data seems to also have had the Rasputin cauldron effect with August wheat shipments put at anything from 4Mmt to 5Mmt dependent on source.
London wheat remained bullish. Nov-21 settling up £0.65 up on yesterday at £197.25/t and May-22 settled up £1.60 on yesterday at £203.20/t.
Matif rapeseed continued to climb to even higher contract highs, Nov-21 hitting a trading high of €648.75/t before settling up €13.25 up on yesterday at €646.25/t. Feb-22 rapeseed settled up €15.75 on yesterday at €636/t. It is now up €76.25 in just over 2 weeks. Canadian canola was also trading higher with the Nov-21 up 9 cents at the time of writing.
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Hanne Bell & Ryan Easterbrook
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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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