Written Commentary
Source: Future Source
US and European Ag markets opened up this morning before falling back in the latter half of today. US wheat was pulled down between renewed weakness in corn and beans and the building world importer demand for wheat. Bulls hang hope on more rhetoric from Chinese Pre Xi, that emergency response system for a big country must include big stockpiles in case of emergencies. Hurricane Ida’s damage continues to be counted, Cargill’s elevator in Reserve, Louisiana which is responsible for nearly 9% of America’s bulk seaborne exports of corn, soybeans and wheat is out of action. Time duration is yet to be confirmed by Cargill. Rain is due in key Argentine areas this week but turning drier next week, key time as wheat moves towards moisture critical heading stage. Australian wheat remains the shining beacon amongst the world’s exporters although the market will be watching next week’s freeze forecast. Chicago Dec-21 wheat was down 8 cents at the time of writing.
Matif followed US markets, hitting a trading high of €246.75/t before settling down €2.50/t on yesterday’s settlement at €242.75/t. EU markets remain supported by supply constraints in Russia. Algeria has booked an estimated 390-460kt of mostly EU wheat: French, Polish and German are all thought to be suppliers. Quality constraints are pushing tenders toward France’s northern neighbours. London wheat markets were quieter today, following Matif lower with Nov-21 settling down £2.50/t on yesterday at £191.75. May-22 settled down £2/t on yesterday at £199.25. UK spot milling wheat premiums have continued to creep up by about £1/week over the past few weeks and today (1st Sept) varied between £20/t and £26/t over feed wheat for September movement full spec bread making samples.
China has sold off a large chunk of reserve corn and wheat stocks to contain high internal prices in the past year. Seasonals for corn and bean still trend lower into late Sept. Dec-21 corn was down 15 cents today and Nov-21 soybeans were down 21 cents on yesterday. Open interest is already down 30% as liquidation is happening. Further rumours that China was seeking additional boats to be filled but yet to be seen. China corn purchases are likely to miss USDA’s forecast of 26Mmt due to a bumper Chinese harvest, weighing on domestic prices and narrowing the gap with overseas prices.
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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.
© 2024 ADM Investor Services International Limited.
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