Written Commentary
London Wheat Report
Source: FutureSource
Happy Monday all!
UK weather starting to improve this week with some dry spells forecast from Wednesday onwards for the majority of us. Some additional sea drone attacks in the Black Sea, this time hitting a small Russian oil tanker and some bridges in the Crimea with also some murmurings around Moscow airport. The state of this threat to shipping, I still believe will very much be limited to targeting each other’s retrospective sovereign vessels. Foreign flagged and owned shipping, I would not expect to be directly targeted, as it has not been this far and would cause a major issue for both sides who are both extremely reliant on sea born exports.
As ever, when a headline reads that ‘All Russian Black Sea shipping’ will be targeted, as was stated from Ukraine, this got markets somewhat excited to an extent, but as with everything in this strange war, what is stated in words and acted upon in reality can be very different. IKAR posted some stats on the Russian crop with grains for 2023 coming in at 137Mmt including 88Mmt of wheat. From this, exports will amount to 61Mmt of grains and 47.5Mmt of wheat in the 23/24 campaign. Russian grains in July 2023 are estimated to have hit over 5.6Mmt according to SovEcon. US weekly wheat export inspections were down 53%, coming in at 275,067t. Aussie grains exports were slow in June due to uncompetitive pricing.
Chicago kicked the day off supported this morning, with Sep-23 trading around 17/18 cents up on Monday’s close, before cooling off throughout the day, being up circa 4/5 cents midafternoon and then taking off later in the afternoon, hitting levels of 657 just before 17.00 London. Matif wheat was also supported on the back of headline trading, following Chicago with Sep-23 settling up €6.00 on Friday at €241.25/t. London wasn’t too exciting today really with volumes pretty slow. Nov-23 hit the £200/t level but failed to break through any higher, settling up £1.20 on Friday at £199.50/t.
USDA reported sales of 132kt of beans to China and 251,460t of corn to Mexico. Chicago soybeans were majorly down on the back of bearish weather forecasts as rains and moisture continue with Nov-23 beans trading down 39 cents at time of writing. AgRural sees Brazil’s 2023 second corn crop at 105.6Mmt vs 102.9Mmt in the previous forecast which again is bearish pressure towards US corn. Corn is trying to pick up on the back of wheat but all the fundamental news keeps it stinted. All eyes are on China although most vols so far are of Brazilian origin. Matif rapeseed was trading lower with Nov-23 settling down €7.50 on Friday at €466.25/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.
© 2024 ADM Investor Services International Limited.
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