Written Commentary
Source: FutureSource
US wheat markets turned bullish today following some fascinating Russian fact contradiction and the market expectations that the WASDE report on Tuesday will portray world exporter wheat stocks usage to be at a record low. Argentinian wheat is having issues due to the ongoing GMO problems, but things could side step if the Argentinian govt decides to ban exports due to poor harvest. Egyptian GASC have tendered for an unspecified quantity of wheat for shipment 21st Nov to 30th Nov with best price reported to be $319.17/t FOB sourced from Romania according to traders. No purchase has been made and result is expected later today. Tunisia’s state grain importer has launched a tender for 100kt durum wheat for Nov-Dec shipment. Chicago Dec-21 was trading up 3 cents and Kansas Dec-21 was trading up 6 cents at time of writing. Minneapolis Dec-21 was trading up 11 cents at time of writing.
Matif wheat continued to find support from both Russian disinformation and the European focused tenders. Matif Dec-21 settled up €5.50 on yesterday at €268.25/t and May-22 settled up €4.25 on yesterday at €259.50/t. EU trade data, now that it has included some figures missing from France and Italy, shows soft wheat exports to be ahead of the pace to meet the EU estimate of 30Mmt this season. In the week ending 4th October, EU soft wheat exports totaled 8.07Mt. To reach the EU export forecast for this season, the EU needs to export circa 560kt of soft wheat per week (AHDB).
Strong market support came from our friends in Russia who have been pushing out some interesting and contradicting information in their stereotypical fashion. The Russian Grain Exporter’s Union announced that Russia could export 37.5Mmt of wheat this season with the head of the association, Eduard Zernin announcing to Interfax. This is slightly different to the previous responses of exports being limited to 31.5Mmt with a total expected harvest around 76Mmt. Russian Ag Ministry put the harvest to date at 75Mmt with still 5% remaining to be cut to justify their 78Mmt crop. Seems like some serious Soviet figure creation. Life would be boring without them. Black Sea market continue to concentrate on nearby exports to beat the tax and quotas. Risk management in the current nonsensical situation in Russia is near impossible.
London wheat followed Matif higher with Nov-21 settling up £2.45 on yesterday at £202.50/t and May-22 settled up £2.40 up on yesterday at £209.45/t.
Rapeseed continues upwards like a missile, Nov-21 hitting a trading high today of €678.25/t before settling up €9.25 on yesterday at €671.25/t. May-22 settled up €7.25 on yesterday at €646.50/t. Support looks set to continue and little relief until the Aussie crop comes online. Global supplies are tight, Canadian production is down 34% to 12.8Mmt.
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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.
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