Written Commentary
London Wheat Report
Source: FutureSource
Well what a yo-yo day on the ag markets today. US grains were trading up in the overnight session and upon opening before reversing and trading lower towards the latter half of the day. Investor liquidation continues in the markets and with the USD hitting 20 year highs, US exports are being priced out of global demand as new crop harvest is in full swing. Recession fears continue (even though this has been murmuring for a while now). Crude dropped below the $100/ba for the first time since April with Brent hitting a trading low of $98.50 at time of writing, last trading at $99.37/ba at time of writing.
USDA also rated 63% of the soybean crop as good to excellent, down from 65% the previous week. Analysts on average had expected a smaller decline of 1 percentage point. Condition ratings improved for U.S. spring wheat, grown in the northern Plains. The USDA rated 66% of the crop as good to excellent, up from 59% the previous week. Analysts on average had expected no change. The U.S. winter wheat harvest advanced to 54% complete as of July 3, ahead of the five-year average of 48% but behind the average analyst estimate of 57% according to Reuters.
South Korea reportedly purchased 65kt of feed wheat and 50kt of milling wheat from the US and 100kt from Australia. Japan is also seeking 70kt of feed wheat and 40kt of barley in the most recent tender. French consultancy Agritel expects war-hit Ukraine to harvest 21.8 million tonnes of wheat this summer compared to a record 32.2 million collected last year, it said today. Still the issue of exporting it. Matif Sep-22 wheat settled down €6.25 on yesterday at €325.50/t.
South Korea’s MFG purchased 140kt of corn at an estimate price of $323.49/t c&f. Matif rapeseed found support with Aug-22 settling up €19.50 on yesterday at €683/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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